Silicon Valley has long had a fascination with transforming tedious analog tasks into frictionless, touch-screen enabled transactions. Having thusly disrupted taxi rides, banking, and shopping, apartment-hunting appears to be next on the list. Mom-and-pop landlords are slowly being replaced with tech-savvy ones, who use cryptocurrency, Venmo, and other apps instead of rent checks slid under the door. Now the online rental platform Rentberry is promising to reinvent the security deposit, too.
Rentberry’s deposit scheme works like this: Landlords will now be able to use the platform’s existing online marketplace to charge a security deposit on a property, using Rentberry’s personal cryptocurrency (aptly, if ridiculously, called BERRYs.)
Instead of paying the deposit in full, however, the renters just put down the first 10 percent as a deductible. Then, a “community” of micro-lenders—a crowd that can range from one to thousands of people—foot the rest of the BERRY bill. Those lenders, in turn, charge renters a yearly interest rate, typically between 3 and 4 percent of the deposit. As with a normal security deposit, if the landlord doesn’t note any damage at the end of the lease, the initial deductible is returned in full to the renter, and the rest goes back to the lenders.
Say a rental deposit is worth $2,000. (The average rate on the site is $1,700, according to Lubinsky, but for ease of calculation we’re using a round number.) At the start of the lease, renters pay $200; lenders pay $1,800. Every subsequent month, renters pay the lenders around five bucks. All told, instead of paying $2,000 on day one, renters end up paying as little as $54 over a full year (assuming they get their original $200 back.)