Apartment landlords and renters haggle over an estimated $45 billion in security deposits annually and one proptech startup is betting the disputes could be settled more fairly and cheaply.
RentCheck, which launched in June 2019 with the aim of bringing transparency to security deposit disputes, said Monday that it raised a combined $3.6 million in pre-seed and seed funding. The solution: have renters perform their own inspections.
The startup’s backers include Jim Coulter, founder of TPG Capital; Ken Goldman, the former CFO of Yahoo; and Jim Payne, the entrepreneur who sold the mobile in-app ad server MoPub to Twitter in 2013.
Cox Enterprises, Context Ventures and Techstars were also among the startup’s investors.
There are other property inspection software services, but RentCheck is the first to facilitate resident-conducted inspections. Property managers list their units on the platform and tenants perform guided, photo-based inspections at move-in and move-out. Renters gain a measure control, while property managers save on personnel costs.
Excluding property managers from the inspection process was, until recently, a foreign concept in commercial real estate. The social distancing mandates during the pandemic effectively forced managers into the arrangement, co-founder and Chief Operating Officer Lydia Winkler told The Real Deal. The number of multifamily units on RentCheck’s platform increased more than tenfold during the pandemic.
Winkler said the benefits of the arrangement are now well-established. Property managers save approximately one and a half person-hours per unit in property management costs, and about 100 hours on average per month across their portfolios, she said. They also stay on top of maintenance issues that might otherwise create lags in occupancy.
“The ROI that property management companies are getting by having their residents do inspections enables them to scale their business and get more leases, which is far more important than having boots on the ground doing routine inspections that the residents can do just as well as if they were there themselves,” Winkler said.
A Series A raise is “definitely on the horizon” for RentCheck, but Winkler did not offer a timeline.