A new startup hoping to capitalize on the feeding frenzy that is trying to rent an apartment in San Francisco launches tomorrow, and may succeed in driving Bay Area rents up even higher in the process. Rentberry, reports the Chronicle, provides a platform for landlords to list their rental property. Would-be tenants bid on the apartment, and, much like eBay, will see other bids and can make multiple offers.
You can see where this is going.
"We strive to maximize your rental price by allowing tenants to submit custom offers and compete in the bidding process," reads the company's website in a pitch to property owners.
"Essentially, we offer a more efficient and transparent application process which has the elements of bidding and an auction," CEO Alex Lubinsky told the paper. The service is expected to launch tomorrow both in the Bay Area and New York, and, according to Lubinsky, people are already signing up.
"Place your desired bid, and track the competition," the company explains in a pitch to renters. "To keep things fair, we'll let you know exactly how much interest there is on your chosen property. You'll see how many offers have been made and what the current highest bid is, so you can make an informed decision."
Using Rentberry will cost both the renter and the landlord. In addition to the bid-up price, the company will charge apartment-seekers a flat $25 fee upon signing. Rentberry also intends at some future point to charge landlords 25 percent of the above-listing price the tenants agreed to pay — every month. For example, if a landlord lists an apartment for $4,000, and the monthly rent gets bid up to $5,000, the landlord made $1,000 over the listing price. And so, going forward, the landlord would pay Rentberry $250 every month. (The company posits that landlords are only likely to see five-percent gains in rents, and the example they give the Chronicle is more modest a property listed for $2,000 that goes for $2,075, so the landlord is on the hook for an extra $18.75 paid to Rentberry for the life of the lease.)
The company might be arriving at a bit of an awkward moment, however, for the local rental market as rents appeared to have plateaued in recent months, and rental agents at some big newly opened complexes are having to offer incentives like free parking and one month free rent to get tenants to sign.
But, we also had a recent assertion that based on modest job growth, SF could stand to see a bump in rents overall of 10.5 percent by year's end.
The company plans to expand to Dallas and Houston in the near future. Assuming anyone actually uses the service, that is.
👏🏼 NOBODY 👏🏼 IS 👏🏼 FUCKING 👏🏼 GOING 👏🏼TO 👏🏼 USE👏🏼 THIS👏🏼https://t.co/wHSlrjD6XW— Cosmic Amanda (@quonky) May 16, 2016
This post has been updated to reflect that it is the landlord, not the tenant, who pays Rentberry 25 percent of the added rent, as was initially reported by SF Gate. SFist apologizes for repeating SF Gate's error.