Renting an apartment. It’s something that almost everyone has to do at least once, if not many times in their life. It can be a daunting, exhausting, and difficult task that can potentially be full of fraud, false information, and misunderstandings to say the least.
What if there were a better way to find, rent, and pay for an apartment each month using Ethereum smart contracts? What if, as an investor only, you could help people move into their dream apartment and earn a steady reward in return? These are the aims of tech startup, Rentberry.
What is Rentberry?
Overview of Rentberry?
Rentberry.com is a growing apartment hunting website that has seen a lot of new members joining since it went live several years ago. After seeing a fair amount of success, the company is now branching out into a new blockchain based platform that would allow for not only the finding of apartments, but also paying rent, and even helping source rental security deposits.
The system will also help keep track of renter history, landlord feedback, and a number of other important metrics that would greatly help renters get a clearer picture of what’s really going on before signing on the dotted line.
The Rentberry Blockchain
The Rentberry Blockchain
The new system is broken up into several components. The first component already exists within Rentberry’s current ecosystem on rentberry.com. That being, the features that help apartment hunters find potential places to live. Things get interesting, however, once the blockchain is involved in the new features of what Rentberry aims to build.
Rentberry will operate with its own BERRY tokens that are ERC-20 compatible. The tokens will be used in one way to pay rent each month through smart contracts. Imagine instead of needing to deal with cash payments, complicated bank transfers, or other confusing payment systems, that no matter where you want to rent an apartment in the entire world, you could do so and pay for it using only ERC-20 cryptocurrency.
In the future, it may be possible to rent an apartment anywhere in the world, all without worrying about local renting laws or currency differences. Everything would be spelled out in the smart contract, and all payments would be with the same standard currency.
Not only that, but the terms of rentals would be clearly stated out and immutable. Each time rent is paid, it would be absolutely provable on the blockchain in the event of a dispute.
Sourcing Security Deposits
One major concern that many renters run into, especially new apartment renters, is paying for hefty security deposits. A security deposit is usually an upfront payment that is made to the landlord and is typically equal to one month give or take of rent. This deposit is to lower the risk the landlord faces from property damages or unpaid rent. Then when you move out, this amount should be returned to you.
For example, if you rent an apartment for $800 a month, you will likely need to pay at least $1600 to move in. In some countries, you may even need to pay three months rent in advance plus one month deposit. For those who are not already financially established, this can make finding an apartment extremely difficult, and may require expensive high-interest loans to be secured from a bank before one can move in.
Rentberry has a fascinating solution to this conundrum.
A New Class of Real Estate Investments
Rentberry Flow of Tokens
Much like other peer-to-peer lending programs like Lending Club, Rentberry will allow for anyone in the world to purchase Rentberry tokens and invest them into a renting contract.
For instance, an investor could invest perhaps as little as $50 each contract, into a broad array of security deposit contracts all over the world, and then earned a regular interest or dividends style payment as a reward for doing so.
Of course, with any kind of peer-to-peer lending, there is a risk of loss. However, as investments can be spread out far and wide over many contracts, and many regions, the risk of a major loss is minimized. This feature alone could represent an entirely new class of investments.
In exchange for the service, the renter, instead of needing to pay a full security deposit, would instead have a much lower monthly payment which is made to pay the interest to the security deposit investors.
The Rentberry white paper also cites that not only is this for those who lack funds for a security deposit, but it could also be useful for those who wish to instead use their security deposits on an investment, in a business, or just to keep his cash instead of having it tied up in the home.
Rentberry certainly has a fascinating concept on offer. Even Forbes has picked up Rentberry as one of it’s top 10 real estate startups for 2018. What we don’t know, however, is how the public will take to the concept.
Will people be resistant to converting their dollars or pounds into ERC-20 BERRY tokens? What about landlords and property owners, will they be willing to accept their rental income in the form of a new cryptocurrency?
It could be years until Rentberry or something like it sees widespread adoption, but it is far from impossible. The benefits offered by Rentberry far outweigh the risks of dealing with it, and so as global cryptocurrency adoption increases, the demand for and acceptance of services like this will only grow.
The only question is, how long will it take?
Image Sources: Rentberry Whitepaper