A startup called Rhino is hoping to do away with the need for a security deposit on rented homes, with a new technology solution it says benefits both renters and landlords.
Essentially what Rhino does is collect a monthly insurance fee at set rate each month for the length of the rental contract.
Rhino provides landlords with an insurance policy they can use to claim for any damages to the property, which are normally covered by the security deposit.
The service is available to both existing and new tenants, which means those who’ve already paid a security deposit can get it back from their landlord if they sign up to Rhino’s plan.
The specific cost of the monthly payments depends on the monthly rent, and also the tenant’s monthly income. On average though, someone who rents an apartment prices at $2,500 to $3,000 a month can expect to pay around $19 a month to forgo the security deposit. The fee is also reduced in the second year for tenants who can prove they’re trustworthy.
There are benefits for both parties, Rhino claims. For renters the advantage is fairly obvious as it means they don’t have to stump up a huge wad of cash before they can move in. It means they can actually use this money rather than perennially keep using it as a deposit. For those who don’t have the money in the first place, it provides them with more rental options as they don’t have to worry about affording the deposit.
Obviously Rhino’s service isn’t for everyone. Those with piles of savings would see little point in paying the startup’s monthly fees, but for those on lower incomes it presents new opportunities.
As for landlords, Rhino claims they benefit as the insurance policy they receive covers about two months’ worth of rental payments. In addition, Rhino says it pays out on all claims within 24 hours. This means landlords don’t have to get into disputes with their tenants over damage. Landlords could also use Rhino as a way of advertising their properties as being available without a security deposit.
Rhino makes it clear that it isn’t offering renters insurance, and says that tenants are still resposible for any damage that was their fault. However, Rhino says this doesn’t include normal wear and tear.