Meet Rentberry, the San Francisco-based startup aiming to streamline and remove headaches from the rental process. Featured by both Inc and Forbes, they’ve built a fully functional long-term (defined as 6 months or more) rental housing platform. The project started back in 2015, and the Rentberry team is now working to incorporate blockchain (and all its benefits) to create a better experience for landlords and tenants.
So many industries have already been disrupted by technological improvements, but the long-term rental space remains relatively untouched with archaic and inefficient practices still the norm. But with the advent of Rentberry, the old tedious way of apartment hunting may be next on the chopping block.
A Brief History of Rentberry
Back in 2015, the founders spent over a month searching for a place in the notoriously difficult San Francisco rental market. They experienced firsthand the struggle of submitting rental applications, the constant back and forth, getting into bidding wars with other prospective tenants, dealing with security deposit hassles and trying to negotiate with landlords.
This process cost them a lot of time, money, and energy. Although frustrating, the experience did leave the founders with one key takeaway: the rental market was crying out for someone to come up with a better way of doing things.
So they set out to build one.
2015-17 was a flurry of activity. The company was officially incorporated in August 2015 and by June of the next year, a beta version of the platform was launched. Fast forward to April 2017 and Rentberry has had a few successful funding rounds under their belt.
They’ve also completed the first “closed-loop” rental platform with a transparent application technology in the U.S. It was around this time that the user base started to really pick up as well. In the fall of 2017, the company patented more of its IP and prepared for the coming move to blockchain and their initial token sale.
As of December 5, 2017 the Rentberry token sale is live.
Rentberry is a decentralized platform, that allows both tenants and landlords to handle all rental tasks in one place.
Smart contracts stand in for paper agreements, a tokenized utility economy allows for smooth transacting and everything is stored immutably on the blockchain. The company has also developed unique auctioning technology for pricing, a proprietary scoring algorithm to help screening processes and a crowd-sourced security deposit fund for saving money (more on these below).
Here is a good introductory video:
The blockchain is the underlying mechanism that keeps account of all the data. Leveraging blockchain technology provides numerous benefits: data cannot be tampered with, payment flows can be optimized, identity can be managed securely, and ultimately the overall rental experience can be improved.
In order for this system to run effectively, a token is needed. So Rentberry is introducing its own cryptocurrency, the BERRY token, which will be issued on the Ethereum blockchain under either the ERC-20 or ERC-223 standard.
The BERRY utility token will be tradeable, can be bought with various fiat currencies, and will be used to transact on the platform. Thus, fees associated with credit cards, wire transfers, bounced checks, etc will be removed and the risk of fraud goes down since everything is recorded on the blockchain ledger.
The BERRY token allows users to carry out pretty much any action they’d like via smart contract. Written in Ethereum Solidity, smart contracts are another key to the future of Rentberry. Having these electronic if-then propositions in place reduces the friction, time and reconciliation issues associated with many traditional rental processes.
On the Rentberry platform, all tenants and landlord information will be recorded on smart contracts and used to achieve various outcomes. Let’s look at a tangible example.
Imagine a scenario where a user is trying to secure a rental property and they put down a security deposit via the Rentberry blockchain. The process would flow through a smart contract in this way:
- The tenant buys BERRY tokens with dollars or euros so as to be able to transact on the network.
- The tenant browses properties, finds one they like and submits an application along with an amount (in BERRY) predetermined by the application deposit smart contract.
- The landlord reviews all possible choices and selects the best option. The smart contract automatically moves the application deposit and applies it to a security deposit (taking a small fee for the network).
- The tenant can then choose to pay the rest of the deposit or crowdfund the remainder (more on crowdfunding below).
This is one snippet of many processes that can occur on the platform, but the magic is that it’s all done quickly, electronically, without any third party, without any issues of trust and it is recorded on the blockchain. Smart contracts will be designed to handle all manner of transactions from the simple one described above, to every token movement or agreement between parties on the Rentberry platform.
For those worried about the security implications of this, fear not. A user wishing to run any activity through a smart contract will be approved only through the use of a wallet/private key that is secured using biometrics.
You may be thinking all this sounds great, but the old system wasn’t so bad… was it?
Is Rentberry Solving a Real Problem?
Renting is a growing trend for younger generations in the U.S. and around the world, and anyone who’s been through a difficult rental process, had a terrible landlord or tried to rent long-term overseas will tell you there’s room for improvement.
Not sold? Consider the following:
- Outdated rental platforms – it’s still common practice to list rental spaces on websites like Craigslist, Gumtree or in some scattershot way on Facebook. This form of advertising offers little value to the actual application process and getting things set up is often tiresome, to say the least.
- Frozen assets – billions of dollars end up frozen in the form of security deposits. Renters with spotless records are not rewarded and the money is left to sit in an account earning barely any interest. People on tight budgets also struggle to make deposit payments up front.
- Bidding wars and a lack of transparency – in hot rental markets, bidding wars are not uncommon, leaving those who were outbid confused and frustrated. The rental process is opaque, and potential renters often feel like they’re shooting in the dark.
- Needless paperwork – everyone’s probably had the experience of filling out some 8-page form, trying to transcribe information from their iPhone, scanning and emailing documents, etc. The whole thing is tedious.
- Uncomfortable face-to-face negotiations – the human element of renting can be stressful. People cannot always be trusted to keep their word and landlords may look for ways to squeeze more money out of their tenants.
Rentberry aims to address the above problems by making rental processes less costly, and more convenient, secure and transparent.
In practice, it looks like this:
At the top of the graphic, you’ve got various facets of the rental process, and each of these is connected to the blockchain. The goal is to reward users with convenience and security, all under one roof. This is the macro view but if you focus the microscope, you will see the individual solutions that Rentberry is offering.
Here are some of the key benefits:
Brokers and agents love to find ways to charge fees. Utilizing blockchain to empower peer-to-peer rental negotiations, agreements, and executions effectively removes all middlemen.
Rentberry also reduces the amount of capital that gets stuck in security deposits through a crowdsourced security deposit network. This network allows any member of the community to help subsidize someone else’s security deposit in exchange for a reward of up to 5% (all paid in BERRY tokens).
This communal banking approach gives users a way to earn rewards through microlending, allows tenants to avoid locking their capital in a large upfront payment and it provides a larger pool of candidates for landlords.
The classifieds model of listing a rental property is old and clunky. Rentberry’s platform offers considerably more value for tenants and landlords alike.
Tenants have access to contracts, rent collection, maintenance requests, landlord history etc. They also have peace of mind in terms of their private information. There’s no need to email social security numbers or sensitive financial documents.
On the landlord side, they have the ability to more easily screen prospective tenants, negotiate, e-sign contracts, collect rent, and hire third-party providers. Market data is provided to both parties so they can make informed decisions about pricing.
The Rentberry platform will exist on the blockchain with users transacting in BERRY tokens (linked to fiat or other cryptos). Blockchain offers a level of cryptographic security that no centralized database can effectively match. All personal information, financial records, and internal communications are safely stored in the blockchain’s immutable record.
This information will be made available to potential landlords/renters only in the event of the other party signing off with their private key or wallet (this is compliant with applicable privacy laws, including the European Union’s GDPR).
Rentberry boasts patented auctioning technology that aims “to help landlords price their properties optimally in both hot and cold markets, and give potential tenants complete visibility on competing offers and more leverage to negotiate.”
Tenants can bid, sign legal rental documents and settle payments using BERRY tokens all with a few clicks. With auctioning functionality built into the platform, the market is free to dictate the price. This may have led some to compare Rentberry to a Craigslist-eBay mashup.
Before entering into any agreement, both parties can see the others’ history on the blockchain. Rentberry also crunches a wide range of factors (rental history, credit score, eviction notices, etc) via a proprietary scoring system and arrives at a tenant/landlord score ranging from 100 – 1,000.
This algorithm captures abstract (but relevant!) data points and turns them into something of value for users. Namely, a clear indicator as to whether or not they want to enter into an agreement with the other person.
Gone are the days when landlords had to rely on little evidence and tenants had few ways of sizing up a potential landlord.
There are a few other exciting developments in the pipeline, Rentberry plans to launch both an Android and iOS version of its app in early 2018. Data generation and utilization tools, smart locks, self-executing rental agreements and various other integrations are humming along as well.
The Rentberry Team
The founders of Rentberry come from diverse backgrounds such as investment banking, real estate, product development, marketing and IT. Their team is currently made up of 23 dedicated (development and engineer-centric) staff and growing quickly.
As a slightly more established startup, Rentberry already has a number of investors on board. They successfully raised $4 million from the likes of Beechwood Ventures, Zing Capital, and 808 Ventures. They’ve also received the support of numerous advisors and some key strategic partners such as Cryptonomos and Melrose PR.
The BERRY Token Sale
Rentberry has a few primary goals with its token sale and conversion to blockchain. One, raise capital for international expansion (currently they’re only live in the US); and two, reduce inefficiencies, inconveniences, and insecurities present in the rental housing market today (going back to their original mandate).
Unlike many blockchain startups, Rentberry already havs a track record and a positive trajectory – 120,000 users, 5,000 cities, and 224,000 properties are already listed on their platform. In many cases, investing in an ICO is to put your money behind little more than a whitepaper and dreams. But in the case of Rentberry, you’ve got an already viable product and a functioning business.
Their ICO began on December 5, 2017 and will conclude on February 28, 2018 (or when the hard cap of $30 million is reached). You can purchase BERRY tokens now on their official ICO website.
To reward early investors, Rentberry is offering the following bonus structure:
Given its $30 million hard cap, the initial supply of BERRY tokens will be limited to 400 million (plus applicable bonuses), with any unsold tokens being burned at the end of the sale. You will need either Bitcoin or Ether (minimum 250 BERRY or 0.1ETH) to purchase.
The token allocation breakdown is:
- 70% of BERRY tokens allocated to the token sale.
- 20% of BERRY tokens will be part of the Rentberry Reserve.
- 10% of BERRY tokens will be distributed to Rentberry’s founders and employees.
The potential real estate use cases for blockchain are vast, but the long-term rental market is perhaps one of the most immediate and compelling.
Rentberry will undoubtedly be criticized and run into technical challenges along the way. They must also get on the right side of the network effect and some have noted that the entry/exit gates to the platform may be tough for a public still only slowly becoming aware of cryptocurrencies.
But the demographic and technological tide is working in their favor. The coming generation is tech-savvy, likes to do everything from their mobile phone, and will increasingly come to understand the value of blockchain systems.
Regardless of what you think of the prospects of this project, the idea of creating a global network that unfreezes security deposit capital is fairly brilliant. The compound effect of this could be huge and this hasn’t been lost on investors. How things turn out, of course, remains to be seen. But those who value a healthier rental market that’s easier, faster and more secure will certainly be rooting for them.
Learn more about Rentberry via their website and whitepaper. To buy BERRY tokens, visit their ICO website. You can also join their Reddit community, follow them on Twitter or keep tabs on the latest Rentberry news on Medium.