Have you heard of Rhino?

[Barbara Lynn]

Hi everyone! For those of you with rentals, this may be of interest to you which I discovered on linkedin. I talk to landlords here where I live and find this interesting to be of benefit with landlords and tenants. I had trouble paying rent during covid crazy (slow income non RE related) and wonder if this could have helped at that time. There are 2 articles that caught my attention. 

This article today has an OPT IN which I did not do: 

Millennials & Gen Z want flexibility and affordability, more than a long-term commitment. Learn why they are flocking to single-family rentals.

This article was a year ago: 

Rhino is revolutionizing the single-family home marketplace for renters. Rent growth for single-family homes has grown by 5x since June 2020.

Have you heard of this company?

I am not affiliated with Rhino. This may help ME as a current renter which is why this caught my attention. 

[Bjorn Ahlblad]

Yeah I have heard about it. There was a post about Rhino on here a while back. Glad it is working out for you.

[Barbara Lynn]

Quote from @Bjorn Ahlblad:

Yeah I have heard about it. There was a post about Rhino on here a while back. Glad it is working out for you.

 Thanks for your comment. I have not taken action as a renter yet. 

[Courtney Duong]

I think @Nathan Gesner mentioned this before.  Wait for him to chime in.

[Nathan Gesner]

I'm ignoring it because it sounds suspiciously like a marketing ploy.

[Peter Tverdov]

We are currently researching a $0 security deposit option for tenants. They would pay us, the management company a small non-refundable annual fee that is basically a third of their traditional deposit. Rhino is basically like that.Then we would turn around a guarantee 1.5x the rent security deposit guarantee to our owner clients. I think it's the future and I'm 90% sure we are rolling it out this summer, just nailing down the specifics. 

[Adam Martin]

I'm not sure this company is what you think it is.  This is basically you paying into a bond that will pay damage and lost rents if you are unable to the landlord but this isn't a collective of money pooled together for the common good.  You are basically paying a risk premium, if there are no issues the money you paid is gone.  If there are the landlord gets paid but Rhino is going to pursue payment from you and you will go to collections so they can try to recoup.

I don't like the whole idea and will not be using it.  One of my major screening criteria is you must have the deposit and first month's rent plus pet deposit within 48 hours of acceptance.  There are a lot of factors out there but savings is a lifestyle and some people are just incapable making sound financial decisions.  Some people are destined to be broke and if they make minimum wage or well into 6 figures their savings account will not contain a comma.  I don't show the house unless you say funds are ready but if you lied and we need to wait until payday this isn't happening.  You are one car breakdown or medical bill away from paying rent since you don't have an emergency savings.  

[Barbara Lynn]

Quote from @Peter Tverdov:

We are currently researching a $0 security deposit option for tenants. They would pay us, the management company a small non-refundable annual fee that is basically a third of their traditional deposit. Rhino is basically like that.Then we would turn around a guarantee 1.5x the rent security deposit guarantee to our owner clients. I think it's the future and I'm 90% sure we are rolling it out this summer, just nailing down the specifics. 

Thanks Peter for the breakdown. For me possibly becoming a landlord, this is appealing. 
As a current renter, I am going to look further into this model. 

[Barbara Lynn]

Quote from @Adam Martin:

I'm not sure this company is what you think it is.  This is basically you paying into a bond that will pay damage and lost rents if you are unable to the landlord but this isn't a collective of money pooled together for the common good.  You are basically paying a risk premium, if there are no issues the money you paid is gone.  If there are the landlord gets paid but Rhino is going to pursue payment from you and you will go to collections so they can try to recoup.

I don't like the whole idea and will not be using it.  One of my major screening criteria is you must have the deposit and first month's rent plus pet deposit within 48 hours of acceptance.  There are a lot of factors out there but savings is a lifestyle and some people are just incapable making sound financial decisions.  Some people are destined to be broke and if they make minimum wage or well into 6 figures their savings account will not contain a comma.  I don't show the house unless you say funds are ready but if you lied and we need to wait until payday this isn't happening.  You are one car breakdown or medical bill away from paying rent since you don't have an emergency savings.  

Thanks Adam. Yes this is true about living paycheck to paycheck for renters. I can relate to this type of living. Interesting feedback and I am very curious to read the pros and cons. 

[Barbara Lynn]

Quote from @Nathan Gesner:

I'm ignoring it because it sounds suspiciously like a marketing ploy.

OK Nathan luv U! Have a great day! 

I have been a renter for decades and I am a bargain shopper (save money) and if this is something I can implement in my life, so be it. The verdict is out atm. 

[Joseph M'Mwirichia]

@Peter Tverdov mind elaborating a little on the 1.5X guarantee on security deposit to your client, my.math isn't adding up. Thanks!

[Chris C.]

@Peter Tverdov

So basically an insurance policy that figured it's not going to pay out to everyone, so as long as the total income is less than the total payout you make money

[Ron Brady]

We’ve had tenants who have used Rhino with us. We found it is helpful to one of the our target groups of residents, first-time, working-class tenants. We’ve never had to seek a payout, so cannot speak to that.

[Jeff Langham]

@Peter Tverdov I hear about “Say Rhino” on the Remote Real Estate investor podcast today and found it interesting. Your post from last April was also very interesting since you mentioned your management company basically takes non-refundable payments. Just curious what would happen if the the tenant decides to stop making those payments and leaves the property damaged.

[Melanie Thomas]

A few years back I looked into Rhino and Obligo. At the time decided to go with Obligo which is very similar. It did help us reduce the barrier or entry and the payout turnaround was quick. They DO charge the tenant fees and make money off payment arrangements made at the end of the lease term. Decided to keep those fees and brought a program in house. Hope this helps, good luck!

[Peter Tverdov]

Quote from @Jeff Langham:

@Peter Tverdov I hear about “Say Rhino” on the Remote Real Estate investor podcast today and found it interesting. Your post from last April was also very interesting since you mentioned your management company basically takes non-refundable payments. Just curious what would happen if the the tenant decides to stop making those payments and leaves the property damaged.

 We do one annual payment a year to avoid that. Lease is not executed until we receive that. Tenant damage is part of the risk you take with something like this. 

[Jay T.]

We use Rhino in our property management portfolio in Grand Junction, Colorado. We have probably placed about 30 renters with Rhino policies in the past year and a half or so and have processed several claims against Rhino policies. The only issue we have had getting the claims paid is when we filed against the renter's old policy and not their renewal policy, however our sister company in Denver (who initially turned us on to Rhino) have stopped using it after a couple of issues collecting.

We have tenants carry 2x the monthly rent in Rhino coverage in lieu of a traditional cash security deposit. Sometimes we approve someone who has disclosed an adverse credit/financial history or has no rental history and we will require 3x coverage. We have tenants add .5x for a pet deposit in lieu of a $500 pet deposit (2.5x or 3.5x respectively) however there are some new pet fee and pet deposit laws coming in Colorado January 1, 2024 and we aren't yet sure how these caps on pet deposits will impact our use of Rhino for this purpose (see below re: legal definition of "Security Deposit").

What questions do you have?

One of the questions that has recently come up for us is whether or not Rhino coverage meets the legal definition of a "Security Deposit" and whether the various security laws apply to these arrangements. Two groups of attorneys we use for evictions and similar matters are surprisingly unfamiliar with Rhino and I am not aware of any case law involving Rhino or other security deposit insurance. We still adhere to the state laws around deadlines to return security deposits and what we have to do to close out a deposit, but if it got messy it could get messy.

We have also been told by our sister company in Denver that this does not work with anyone receiveing a housing voucher/subsidy, which we have also been unable to confirm in our local market including directly with our local housing authority. Seems that we're operating in a gray area.

Hope this is helpful!

[Michael Smythe]

Another issue is transferring property management.

If the new PMC doesn't have a Rhino account, it gets difficult.

[Bruce Lynn]

Quote from @Barbara Lynn:

Hi everyone! For those of you with rentals, this may be of interest to you which I discovered 

Hi cuz.  Have you been using Rhino?  Like it?  Any issues?

[Jamie Petraglia]

Alternative deposit solutions only have a small adoption per building. You're still dealing mostly with cash deposits. The problem with insurance/surety bond model is the resident is paying a non-refundable fee each month (or one-time total) and they don't realize they still owe the damages at the end of the lease. The admin work for the landlord is still there and you don't get full claims like a traditional deposit.