Rental rates are rising strongly just about everywhere. NAR Chief Economist Lawrence Yun in May forecast an average annual rent growth of 4.4% over the next five years. That bodes well for housing providers but presents challenges for tenants who hope to someday save for a home.
Tech startups are devising myriad ways to serve real estate professionals while helping renters navigate the market. Rent tech, a category of proptech focused on the rental housing market, can include lead qualification, listing distribution, lease management—even collecting the rental payments themselves. In July, the National Association of REALTORS® hosted a tech meetup on the topic, featuring three rent-tech founders. Here are highlights of the conversation between moderator Liz Sturrock, RCE, chief of MLS and innovation for the Miami Association of REALTORS® and Rowland Hobbs, CEO and co-founder of Stake; Ishay Grinberg, CEO and founder of Rental Beast; and Sipho Simela, CEO and founder of Matrix Rental Solutions.
Stake incentivizes renters by paying them cash back when they take actions like paying their rent on time or renewing their lease. In fact, owners can provide cash back for “anything where you want to change rental behavior,” Hobbs said. “We’re bringing the power of loyalty into the rental market.” The rewards come through the Stake app, where tenants also have access to free banking services. “Folks are feeling the squeeze on affordability. It’s happening across all income brackets,” Hobbs said. “Being able to give cash back is just the first step. We then surround them with banking services. Every time they swipe their Stake Visa card, they’re getting more cash back. Whether they’re saving for a home, saving for their next car, or just saving to fix the car, we can help them get there.”
The company uses AI to determine how much incentive is needed to drive tenant behavior. “We all may guess how much money it would take to get tenants to change an air filter or replace a lightbulb. What our machine learning does is figure out exactly how much to give,” Hobbs said. On average, he says, $1 of incentive gets back $2.11 in value.
Rental Beast is a database of rental properties. Housing providers list for free on the platform and can use the site’s technology to determine pricing, screen applicants, and even determine which improvements will drive additional rental revenue. “We tend to think in terms of bedrooms and bathrooms, but sometimes an in-unit laundry or a dog-washing station will get more interest.”
Through hard work and elbow grease, Grinberg said, the company has been able to achieve “70% to 80% penetration in every market we exist in. Our goal is to bring transparency to the market. Whether you’re a consumer, an agent, a landlord or an investor, it’s always difficult to know what’s available and for what price, so we try to consolidate all that data into one place.”
Rental Beast data is integrated into some MLSs and association websites, and in July, the National Association of REALTORS® announced a partnership with the company. NAR members now have free access to Apply Now by Rental Beast, the secure Fair Credit Reporting Act–compliant online rental application and tenant screening engine.
Matrix Rental Solutions is a tenant application tool focused on the ability to pay. The company’s scoring model produces an inclusive tenant score, allowing housing providers and property managers to underwrite and approve tenants in less than 15 minutes. “Rather than look at traditional consumer credit scores, we look at the totality of a person’s financial profile, including assets, income, and employment data,” Simela said. “We connect to 16,000 banks and 130,000 employers. We make access to good clean asset, income and employment data as quick as hitting a button.”
The company’s universal digital rental application enables prospective tenants to fill out one application rather than applying to multiple housing providers. That can be a game changer for those who have a limited time to use housing vouchers, Simela said. For the affordable market and for those who aren’t W-2 workers, he added, the Matrix scoring system offers a fair shake.
Stake and Matrix are participants in the 2022 REACH Commercial program. Rental Beast is a graduate of REACH Canada. Through REACH, tech founders are able to fine-tune and grow their innovative tools with the help of mentorship, education and market exposure.