What is Rentberry?
Rentberry is a new-to-blockchain rental housing platform. Rentberry is not a typical blockchain start-up, in that they already have an established platform and users (tenants and landlords). They are relatively new however, only going live early 2017, and the blockchain leveraged upgrade of their platform has yet to be implemented. Their business currently caters to cities in the U.S.A.
The purpose of Rentberry’s Initial Token Sale (ITS), and conversion to blockchain is to (1) raise capital to expand internationally, and (2) reduce inefficiencies, inconveniences, and insecurities present in the rental housing market today.
Rentberry’s use case is that although the number of renters has substantially increased, with the average person renting until 40 years of age, there remains a number of problems in the current rental housing ecosystem. These include: (1) tedious rental applications, (2) frequent bidding wars with other prospective tenants without transparency on the current bid, (3), uncomfortable face-to-face negotiations, and (4) frozen security deposit assets regardless of tenant’s credentials and track record, to name a few.
Rentberry claims to make this process less costly, more convenient, secure, and transparent.
Less costly: Agents and brokers sometimes charge additional fees for minimal services, and landlords for tenants to freeze thousands in rental security deposits. Rentberry will eliminate the need for agents and brokers by allowing peer to peer rental negotiations, agreements, and executions. Rentberry will also provide a crowdsourced security deposit network which will effectively unfreeze security deposits to generate interest.
Convenient: Many practices still involve posting listings or classified ads in local newspapers. Websites are available such as Craiglist, Zillow, Rightmove, Zoopla, but provide limited information on properties, and no support for contracts rent collection, maintenance requests etc. Rentberry will provide a platform with all services in one place, including screening prospective tenants, negotiating, e-signing contracts, paying rent, and hiring third-party providers. Landlords can reject or accept applications in a single click, while providing them with market data to make educated decisions about pricing. The same goes for tenants.
Transparent: Tenants will be able to see other bids on the property. They will also be able to adjust their bids, making this a true auctionary platform. Tenants and landlords will be able to rate each other by submitting reviews. Both parties can access each other’s rental activity via the blockchain. Credit reports, background checks, social media, bankruptcy records, eviction history, and past due account information will also be combined with this information and processed by Rentberry’s backend scoring system to create a tenant / landlord score from 1,000-10,000.
Secure: The platform will be transported to the blockchain, and BERRY used a means of transacting. Scheduling, internal communications, renter and landlord profiles and scores, will all be stored securely and cryptographically on the blockchain. Tenant history will only be available to landlords upon application for a rental, when the tenant cryptographically signs the application with their private key.
Other proprietary features:
Syndication: Using BERRY tokens, landlords can promote their listing not only on Rentberry.com but on additional rental sites that join the ‘Rentberry syndicate’.
Crowdsourced Security Deposit Network: Members of Rentberry will be able to utilize BERRY to fund other tenants’ rental security deposits as a type of loan. They will have access to tenant history, information and scores. The benefit to funders will be in the form of interest (3-7%) and ‘other’ rewards for tenants. Unfortunately it does not seem that Rentberry has fully established how this will work, and why funders would want to lock up their BERRY in this investment, which may be subject not only to BERRY currency value fluctuations, but dependent on the tenant not causing damage. An investor could make 3-7% with more safety in the stock market, or much more with riskier crypto investments. Additionally, not having tenants pay a deposit might remove some of the incentive for them to take good care of their rental.
Auctioning technology: Rentberry believes its technology used to negotiate bidding is intellectual property and is currently filing for patent protection. The technology allegedly will allow for landlords to appropriately price their property effectively in any market conditions, and tenants the ability to seamlessly and transparently negotiate and compete with other tenants. Of note, the application cost for a rental is 1000 BERRY. Any successful rental will have 950 BERRY go towards initial payment, and 50 to Rentberry as a fee. All unsuccessful applications will have funds returned.
Integrations with blockchain and other companies: Rentberry mentions potential collaboration with CIVIC for biometric identity verification, and APII for verified education and professional records. They also mention integration with third party service providers and utility companies to provide seamless utility bill payments. These are purely hypothetical at the time of writing.
Smart locks: Team is currently working on smart lock technology that can be used by landlords to unlock a rental for a potential tenant to view the property. Identity would be confirmed by CIVIC, and the previous issue in this space of electronic lock battery life would be solved by using power from the tenants connected smartphone.
Data generation and utilization: The Rentberry platform will utilize a common theme in blockchain space: data decentralization. The platform, with all data stored on the platform, will offer tenants and landlords the option of commercializing said data to be accessed by third parties. This will be under the control of the user, compliant with security and privacy laws, and will reward users in BERRY. Not noted, is what contact information will be provided to these companies, if users opt for that level of data disclosure. We all know that once your email is out there, there is very little control over whose hands it ends up in. Therefore, this information would ideally be conducted within the Rentberry platform.
Usecase for the BERRY token:
The BERRY token will be used for all payments on the platform. Landlords, after collecting rent in BERRY, can pay for promotion, invest in security deposits, and hire maintenance providers. Tenants can make rental payments in BERRY. Thus fees associated with credit cards, wire transfers, bounced checks, etc will be removed, and security of transaction with the immutable blockchain ledger.
The following paragraphs outline some problems evident in Rentberry’s whitepaper and proposed platform, at the time of writing. These are not meant to discourage or encourage investing, but to provide insight on some of the challenges Rentberry will face. An analysis of any blockchain company would identify many challenges.
- Rentberry’s website has some formatting issues that were apparent on first use. This is surprising for an already established business and given the company team has many (5) frontend developers.
- The bonus structure of their main ICO (volume bonus for purchasing 5+ETH and for large 300 ETH purchasers) is not good practice. See Vitalik Buterin’s tweet for the reasoning.
- There is a clear unevenness in demand on their platform, as they have 224,000 properties listed, but only 4000 rental applications processed. One might question Rentberry’s profitability and business model.
- It is stated in their whitepaper that landlords, collecting rent, could use the BERRY to pay for promotion of their properties. This assumes that the landlord has more than one property to rent, which is probably not the case for the average landlord.
- It is concerning that there is no process outlined in the whitepaper to ensure liquidity of BERRY. In general, a conversion of the platform completely to BERRY assumes that cryptocurrencies have mass adoption, and this BERRY could then be used or easily converted to a currency to be used in the real world. Given the current state of crypto, landlords will want to liquidate their rent payments to fiat so that they can use them (and also not expose themselves to currency fluctuations). This doesn’t seem incredibly convenient, even though Rentberry’s stated purpose is to make the rental process more convenient for all parties. Other blockchain companies in this space seem to offer rental payments converted automatically to any ERC20 token.
- It is also advisable to go through their original bitcointalk forum and their newer one, as there are some fraud allegations, although these have not been proven or disproved. These forums are also filled with many good questions with answers provided directly from the Rentberry team.