The Real Deal New York

Auction sites want to rent apartments to the highest bidder

Startups aim to be the eBay of the rental market
April 03, 2017 11:30AM

Going once, going twice, rented!

Apartment-rental websites like the San Francisco-based Rentberry and Biddwell in Vancouver want to turn the apartment hunting process into an eBay-style auction, the Wall Street Journal reported.

The idea is to find an equilibrium in rental markets, either ones where tenants offer more than the posted rent or those where landlords at trying to fill vacancies. Some affordable-housing critics think it may drive up rents in areas that are already out of reach for many renters. And experts told the Journal that in markets like New York City where there’s already plenty of public information on the rental market, auction sites may have little effect on pricing.

When Rentberry launched in early 2016, the company said it would raise rents on average by 5 percent. But the company’s founder said tenants have actually saved 5.1 percent compared to listed prices in the 10 cities where it active.

It should be noted, though, that nationwide there is an oversupply of apartments, said Bozzuto Group executive Toby Bozzuto, who manages 60,000 apartments in the country.

Rentberry now charges a one-time fee of $25 for every completed deal. But it plans to charge a fee each month of 25 percent of the difference between those posted and the auction-winning rent to the landlord or tenant – whoever gets the better deal in the auction.

These companies are popping up at a time when home-sharing giant Airbnb is considering getting into the rental market, but their main advantage may simply be streamlining the paperwork involved in the rental process. [WSJ] Rich Bockmann