Rhino or guarantor instead of collecting security deposit

Rental Property Investor · Dallas, TX · Member since 2019 · 88 posts · 55 votes

Has anyone ever used Rhino or guarantor instead of collecting a security deposit? I can't seem many reviews on either company. They advertise as an insurance policy to cover losses rather than having a security deposit. These companies screen the tenant and offer a monthly payment plan for coverage. Supposedly, this helps the landlord rent their units faster and helps the tenant save money on a large security deposit.

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Nathan GesnerBusiness Member

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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes

Originally posted by @Emanuel Ohunwu:

I have not used Rhino, but I've used a similar program for my the 400 rentals I'm managing and I know managers with thousands of units that use Rhino. Instead of paying a $2,000 deposit, the Tenant pays a small monthly fee. The landlord is guaranteed claims up to $2,000. It's the same level of protection for the Landlord but it's less expensive for the renter to move in, making it a win-win.

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Nathan GesnerBusiness Member
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Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
5y
Originally posted by @Emanuel Ohunwu:
Has anyone ever used Rhino or guarantor instead of collecting a security deposit? I can't seem many reviews on either company. They advertise as an insurance policy to cover losses rather than having a security deposit. These companies screen the tenant and offer a monthly payment plan for coverage. Supposedly, this helps the landlord rent their units faster and helps the tenant save money on a large security deposit.

I have not used Rhino, but I've used a similar program for my the 400 rentals I'm managing and I know managers with thousands of units that use Rhino. Instead of paying a $2,000 deposit, the Tenant pays a small monthly fee. The landlord is guaranteed claims up to $2,000. It's the same level of protection for the Landlord but it's less expensive for the renter to move in, making it a win-win.

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Melanie H.
Member since 2020 · 2 posts · 2 votes
5y
Nathan G,
What provider are you using? I’ve been surprised at how little discussion there is on BP given the popularity of deposit insurance. Are you satisfied with their coverage? Do they hassle you over claims? Thanks!

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Scott Forney
Rental Property Investor · Washburn, IL · Member since 2020 · 16 posts · 8 votes
5y
@Emanuel Ohunwu
I just hired a management company that prefers to offer "Say Rhino." They charge a $300 reset fee instead of a deposit and the tenant pays about $12/month for a $3,000 policy that covers damages or rent if they don't pay. Apparently this has saved tons of landlords recently. There may be additional benefits that I'm not aware of, but those were the two that stuck in my head. Definitely attracts a bigger tenant pool to your rentals as they don't have to have such a large deposit.
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Emanuel Ohunwu
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Rental Property Investor · Dallas, TX · Member since 2019 · 88 posts · 55 votes
5y
@Scott Forney I tried to get rhino, but they gave me the run around. The sales guy told me they typically serve people that own 50 units or more. I guess I was too small for them.
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James York
Member since 2020 · 137 posts · 158 votes
4y
@Scott Forney are you suggesting a reset fee is basically just covering the first $300 of incidentals in lieu of going after the security? I like that idea, but would probably have to amend the lease.
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Payman A.
Los Angeles, CA · Member since 2015 · 117 posts · 13 votes
4y
Hi all,

Researching Rhino now as my new PM is using it. One thing I want to point out, which makes a difference to the tenants really, is that this is apparently a bod (not insurance). You can read more in the following article and Rhino's own website:

https://shelterforce.org/2020/...

https://www.sayrhino.com/blog/...
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Maria S.
Member since 2018 · 45 posts · 48 votes
4y
@Emanuel Ohunwu, I've tried to reach out to Rhino. I was supposed to receive a call back within 48 hours, and that was a month ago. It seems that they are not interested in smaller landlords. I have 12 units.
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Emanuel Ohunwu
OP
Rental Property Investor · Dallas, TX · Member since 2019 · 88 posts · 55 votes
4y
Yea, I will just stick with the traditional way with security deposits.
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Ronda R.
Investor · Atascadero, CA · Member since 2015 · 238 posts · 90 votes
3y
It looks like Rhino's minimum doors is 150 before they will work with you. https://www.sayrhino.com/resid...
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Jay T.
Property Manager · Grand Junction, CO · Member since 2017 · 8 posts · 3 votes
3y
I posted some comments in a less active and older thread, will paste here as well. We use Rhino and are generally happy with it though their customer service leaves a LOT to be desired. We have only had issues collecting on a claim once where we submitted a claim wrong and didn't get the correction in before the deadline to submit a claim had expired. Of course, in that case we have the option of collections if the tenant doesn't pay when contacted.
What questions do you have? We had ~110 doors when Rhino took us on. We added a checkbox to the security deposit clause in the lease where the tenant either checks cash security deposit or checks the box for a Rhino policy "in lieu of a traditional cash security deposit."

Other thread where I commented: https://www.biggerpockets.com/...

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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!
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