Rentberry has been around for almost three years. It raised a record-breaking amount of ICO and attracted a lot of media attention. Rentberry was featured on prominent news sites as well as national television. It received a lot of media exposure due to its custom offer feature, which let tenants offer their price for the rental. However, Rentberry is much more than that; it is a new mechanism of communication that aims to empower tenants and landlords.
The visionary behind Rentberry is Oleksiy Lubinsky. A Ukrainian native, he graduated from UC Berkeley with a degree in Economics and Business Administration. After that, he worked as an investment banker overseeing complex M&A deals, advising large corporations and private equities. After a successful career, he decided to “run his own show”. His first company was called City Hour. It aimed to improve existing business practices. The business idea came from his personal experience and a desire to make networking easier.
Oleksiy found a flaw in the existing business infrastructure and developed a specific solution to adjust it. LinkedIn does not have a specific function for matching business professionals with networking events. That is where Oleksiy Lubinsky seized the opportunity. “Let’s say you have a short stay in London and want to take a glimpse at the UK legal market. Consequently, you want to meet a London-based lawyer today. You search LinkedIn and find thousands of lawyers. However, you don’t know their availability and if any of them fit into your time slot. That is where our application comes into play,” says Oleksiy. City Hour application did not attract enough of an audience. The company together with the technology was sold in January 2015.
Around that time, Oleksiy and his partners encountered a problem with long-term renting. It took them 30 days to find the rental property they searched for. They noticed that there is a significant informational asymmetry between the customers and the real estate agents. Most of the existing listing websites have really limited functionality and act as classifieds. People use them to aid their research and search for contacts. The Real Estate agents remain the main point of contact and the ultimate intermediary between the tenant and the landlord. Agents and brokers own the finish line, they control negotiations and set the final price. The negotiations are blindfolded and various applicants engage in under-the-table bidding wars. At the same time, landlords need to share the earnings with the agents, while it is unclear what kind of service they are paying for. “You have to pay an agent an equivalent of monthly rent. For what? For opening the door and walking around? Most of the time they are not qualified to answer any in-depth questions. You ask about the model and power consumption of the air conditioner and they are speechless,” says Oleksiy. This situation creates an unnecessary burden for all interested parties. “Both tenants and landlords get really irritated when working with an agent. And our task is to remove this friction point and the unnecessary intermediary,” he adds.
According to Oleksiy Lubinsky, most listing services also provide an inadequate assessment of the market. Their limited functionality generates limited data points. Lubinsky elaborates, ”They show you the listing, photos, and description of the property and that is it. They have no idea if the property actually gets rented out, and for how much it was rented out, etc.” Estimates based on the listing prices are fundamentally flawed. The asking prices are altered a couple of times during negotiations and it is not reflected in statistics of the popular listing websites. That creates an insufficient market picture for the renters and landlords. Those countless frustrations made Oleksiy Lubinsky and his partners think about a possible remedy to the limitations of the industry. They decided to improve the distorted rental ecosystem and created Rentberry.
From the start, Renberry was designed as a closed loop system with automation of all the standard rental tasks. According to Oleksiy Lubinsky, their task was to create a platform where “you can do all the rentals tasks A to Z”. Currently, the platform provides an opportunity to negotiate the price, sign a lease, submit a maintenance request, run credit and background checks. The long-term goal is to make Rentberry an ultimate solution to any rent-related tasks. Rentberry is aspiring to integrate tenant insurance and various third-party service providers. “Ideally, we want to offer various third-party providers through the platform: housekeepers, plumbers, electricians. Essentially we want to create a symbiosis between our platform and a company like Handy,” says Oleksiy.
In a closed-loop system, this integration will allow the company to collect more data points and provide a comprehensive picture of the market. An even more ambitious goal is set in the Rentberry ICO White Paper. The company is planning to implement a blockchain based solution to allow crowdsourcing of the security deposit. With this technology, Rentberry is planning to unfreeze half a trillion dollars on the bank accounts, tokenize them and create a liquid market for peer-to-peer lending.
Rentberry is quickly expanding. Initially, it operated in 40 cities across the US. In April 2017, Rentberry went nationwide. Currently, Rentberry is planning to take their business globally and offer their services to residents of Canada, UK and Australia. Together with this wide outreach and media coverage, Rentberry also attracted some ardent critics. In certain regions, Rentberry encountered a strong pushback from the local authorities. Seattle issued a temporary ban on all of the rental-bidding platforms, while Australian cities are considering this option. Oleksiy Lubinsky is not concerned about this negative publicity. He points out that every groundbreaking innovation is initially met with hostility. “When people lack the knowledge about a technology they tend to freak out,” he adds.
Oleksiy Lubinsky brings up the examples of Airbnb and Uber. Those companies were also initially met with suspicion. Critics were concerned that Uber will take away jobs from taxi drivers, but they failed to account for thousands of newly created jobs and a more balanced market. “The same thing is happening with Rentberry,” says Oleksiy. Some residents are concerned that the auctioning model will drive the prices up. Those people do not acknowledge that auctioning is already happening behind closed doors of the broker’s office without any transparency or accountability. Rentberry wants to bring transparency to this shady business model, and let people see what the demand is for the property and make an informed decision. “Our technology endeavors to balance the market and establish an equilibrium. Where supply and demand are balancing naturally, without government or any third-party interference,” says Oleksiy Lubinsky.
