There's now a website that lets desperate San Francisco renters compete in apartment auctions
San Francisco's housing market is so insane that people are living in parking lots and tiny boxes in other people's living rooms just to stay afloat. Now potential renters can bid on their dream apartments online, driving prices ever upwards.
Rentberry, an online auction site for long-term property rentals, is like Craigslist meets eBay. It aims to streamline the rental negotiation process for both tenants and landlords by bringing the process online.
A homeowner or landlord lists a property on Rentberry, and includes a suggested price, photos, and a brief description. Interested tenants submit a credit score and a custom offer, and the seller selects a winning applicant from the pool.
From the tenant's perspective, "you have no idea what the demand for the property is or what bids have already been submitted," Alex Lubinsky, CEO of Rentberry, tells Tech Insider.
Tenants may make multiple offers before the auction ends, maximizing their chances of success. The prospective renter never needs to leave the couch.
The website claims to eliminate all hassle by allowing the two parties to coordinate a meet-up time and sign "legally binding" documents through a web form. Rentberry charges tenants a $25 service charge once the agreement is signed and performs credit checks and background checks free of charge.
The service launches in the Bay Area and New York City on May 17. Lubinsky tells The San Francisco Chronicle that hundreds have already signed up.
Lubinsky says his job is not to make the properties available to everyone, but to keep supply and demand in check.
But Rentberry presents a few issues. First, services that work to satisfy supply and demand issues must have both: supply and demand. Rentberry isn't that valuable to renters if there aren't many units available on it, and it's not useful for landlords if there aren't tons of renters vying for their units.
Rentberry could also disturb the already precarious balance of the rental market, especially in the Bay Area where prices are sky-high. Even in San Francisco, apartments usually go for relatively close to their listing price, no matter how many applicants there are. Rentberry potentially makes it easier for rent prices to be driven up.
The startup argues the $25 fee is worth the possibility of saving countless apartment-hunting hours and rental application fees. It sounds more like the rental market got a new middleman, for better or worse.