Anyone Using Rhino as an alternative to tenant security deposit?
Investor · Anchorage, AK · Member since 2015 · 267 posts · 76 votes
Anyone Using Rhino as an alternative to tenant security deposit?
Most Popular Reply
Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
3y@Ronda R. @Eric James @Jay Hinrichs @Warren A.
Just a follow-up.
Rhino is insurance. Pay the monthly charge, they cover losses. They do try to go after the Tenant to recover what they've spent, but they don't have direct access to tenant funds.
Obligo is a "billing authorization" which means the Tenant gives them access to a bank account and a credit card. When there are charges, Obligo pulls the funds from the Tenant's bank account or credit card. If the Tenant has a dispute, they fight with the Landlord, not Obligo. If the Tenant shuts down their accounts, Obligo still pays the Landlord and takes responsibility for going after the Tenant to recover the funds.
How does it work? Landlord determines the amount they want coverage for, typically the same as a traditional deposit. Obligo charges a monthly fee based on the dollar amount and Tenant's credit score. The Tenant charge is somewhere around $10 - $20 per month, so it's easy for the Tenant to absorb. If there are charges, Obligo pulls from the Tenant's account and makes the Landlord whole. The only time Obligo loses is when the Tenant shuts down their account, but they've told me that happens 1-2 times a year out of tens of thousands of accounts. Tenants just don't think about it.
When you hold a large deposit, many tenants automatically write it off. They try to use it as last month's rent or fail to clean because they assume the Landlord is going to keep the deposit anyway (far too many Landlords do). When the Tenant has a billing authorization, they abide by the lease because they know you can take more money from them. They can't demand you apply the deposit to last month's rent. They won't leave the house filthy because they know it will cost them money out of their account. It psychologically changes the game and puts pressure on them to behave.
How does Obligo make money? If the average monthly payment is $10 and they have 10,000 renters signed up, that's $100,000 a month or $1.2 million per year. They collect almost all of the claims from the Tenant's bank account. They could lose $500,000 per year and still earn $700,000 per year. I suspect their numbers are even better than that.
The DIY Landlord Book4.7248 Reviews
40 Replies
- Rental Property Investor · Cherry Hill, NJ · Member since 2015 · 626 posts · 495 votes4y
There were other posts about this a while ago. Basics it is an insurance company. While I have no experience with this, I would imagine you would have to jump through the hoops that you would have to go get compensated for damages. Proof that it is damage vs wear and tear. Who wants to go through all that hassle. An insurance company’s job is not to pay out.
They make money when they collect more premiums than what they pay out. I am curious to know what happens when the policy ends and the tenant doesn’t want to or doesn’t renew the policy and doesn’t tell you? What if the policy is cancelled half way through?
There are too many variables.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes4y
I know some professional property managers that use Rhino and they say it works great.
The DIY Landlord Book4.7248 Reviews - Investor · Waco, TX · Member since 2014 · 60 posts · 32 votes4y
WE are now using it, but I have not had to make a claim yet. Tenants really like the option. WE upped out security deposit coverage from 1x rent to 2x rent when we implemented, and that has been pretty seamless. I have talked to some Professional (Larger) PM's than me. As I understand it the PMI Franchise is rolling this out to all of there offices. The message from Rhino is that they pay 100% of their claims. The PM's I have talked to that have experience with them said that they have never had a claim denied.
- Investor · Anchorage, AK · Member since 2015 · 267 posts · 76 votes4y
@Nathan G.
Is the main benefit that the professional property managers notice is that they can fill vacancies more quickly when they can offer the zero security deposit through Rhino?
Or is it the ease of the claims process? Or something else?
- Investor · Waco, TX · Member since 2014 · 60 posts · 32 votes4y
We are now using it, but I have not had to make a claim yet. Tenants really like the option. WE upped out security deposit coverage from 1x rent to 2x rent when we implemented, and that has been pretty seamless. I have talked to some Professional (Larger) PM's than me. As I understand it the PMI Franchise is rolling this out to all of there offices. The message from Rhino is that they pay 100% of their claims. The PM's I have talked to that have experience with them said that they have never had a claim denied.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes4y
Quote from @Tricia O'Brien:
@Nathan G.
Is the main benefit that the professional property managers notice is that they can fill vacancies more quickly when they can offer the zero security deposit through Rhino?
Or is it the ease of the claims process? Or something else?
It makes it easier for tenants to move in and the claims process is quick and easy.
The DIY Landlord Book4.7248 Reviews - TX · Member since 2018 · 154 posts · 92 votes4y
I use it and it’s great. I’ve made a few claims and I’ve had nothing but good luck. Claims process is easy, they are super responsive and I usually get paid in 3-5 days. Great for the tenant, great for the property owner. Not sure how they make money, but I don’t care - I will use them as long as possible!
- Investor · Atascadero, CA · Member since 2015 · 238 posts · 90 votes3y
Quote from @Ariel K.:
I use it and it’s great. I’ve made a few claims and I’ve had nothing but good luck. Claims process is easy, they are super responsive and I usually get paid in 3-5 days. Great for the tenant, great for the property owner. Not sure how they make money, but I don’t care - I will use them as long as possible!
They make their money on premiums. When they have to pay out a claim they go after the renter for reimbursement of whatever dollar amount they paid out. It seems like a great deal for the landlord but I have been researching and it is not so great in the long run for the tenant. The limits for what you can collect for a security deposit do not apply here so the limit can be much higher. If the tenant has a skanky landlord that makes unfounded claims, the tenant basically has no recourse. They are required to pay back the insurance company or have their credit marred and they can no longer use the "insurance".
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes3y
@Tricia O'Brien
I know of a company like this and in some states it’s required for landlords to offer it
7e investments53 Reviews - Investor · Anchorage, AK · Member since 2015 · 267 posts · 76 votes3y
@Ronda R.
So can you currently purchase Rhino if you have fewer than 5 units?
- Investor · Atascadero, CA · Member since 2015 · 238 posts · 90 votes3y
It looks to me that the minimum is 150 properties. The drop down when you send inquiries starts there. Here is the link:
https://www.sayrhino.com/resid... - 3yPeter TverdovBusiness MemberDeveloper · New Brunswick, NJ · Member since 2015 · 1k+ posts · 2k+ votes
Our property management company has shifted to maybe 70% of our portfolio no longer taking deposits. We are a year in, won't really know for a few years but it's okay so far.
- Bay Area, CA · Member since 2016 · 79 posts · 43 votes3y
My PM initially touted Rhino ~ 1 year ago but lately has changed course. I know that sounds vague but I was not given the details. What I took away from the brief conversation, however, was that it's not the silver bullet it was thought to be to reduce overall homeowner cost during turnover.
- 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Nathan Gesner:
Quote from @Tricia O'Brien:
@Nathan G.
Is the main benefit that the professional property managers notice is that they can fill vacancies more quickly when they can offer the zero security deposit through Rhino?
Or is it the ease of the claims process? Or something else?
It makes it easier for tenants to move in and the claims process is quick and easy.
I wonder if these are like pay day loans super high interest.. does anyone know what the interest rate is.. that could be the play.. be the lender on these deals :) - TX · Member since 2018 · 154 posts · 92 votes3y
@Ronda R. I understand how they are supposed to make money but when you take in $15/month and have to pay out $1,000 in claims, the economics seem off to me. Given they want to cater to lower income tenants, I would be interested in their collection rates, which I bet aren’t great.
- Investor · Malakoff, TX · Member since 2017 · 2k+ posts · 2k+ votes3y
Obvious first question is: what happens when the tenant stops making those monthly payments? Does their policy lapse and become invalid?
Also, a $10-20 /month payment would take years to equal a security deposit, much less make profit for Rhino.
- Investor · Atascadero, CA · Member since 2015 · 238 posts · 90 votes3y
@Ariel K. I am with you. I bet their collection rate is not very high. I also wonder what their claims rate is. I know Jetty is a Farmers Insurance product and it has to be profitable otherwise they wouldn't be doing it. It's an interesting concept.
- Investor · Atascadero, CA · Member since 2015 · 238 posts · 90 votes3y
Quote from @Ariel K.:
I use it and it’s great. I’ve made a few claims and I’ve had nothing but good luck. Claims process is easy, they are super responsive and I usually get paid in 3-5 days. Great for the tenant, great for the property owner. Not sure how they make money, but I don’t care - I will use them as long as possible!
How many units do you have? I have 4 doors. I doesn't look to me like they deal with the little guy like me.
- Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes3y
@Ronda R. @Eric James @Jay Hinrichs @Warren A.
Just a follow-up.
Rhino is insurance. Pay the monthly charge, they cover losses. They do try to go after the Tenant to recover what they've spent, but they don't have direct access to tenant funds.
Obligo is a "billing authorization" which means the Tenant gives them access to a bank account and a credit card. When there are charges, Obligo pulls the funds from the Tenant's bank account or credit card. If the Tenant has a dispute, they fight with the Landlord, not Obligo. If the Tenant shuts down their accounts, Obligo still pays the Landlord and takes responsibility for going after the Tenant to recover the funds.
How does it work? Landlord determines the amount they want coverage for, typically the same as a traditional deposit. Obligo charges a monthly fee based on the dollar amount and Tenant's credit score. The Tenant charge is somewhere around $10 - $20 per month, so it's easy for the Tenant to absorb. If there are charges, Obligo pulls from the Tenant's account and makes the Landlord whole. The only time Obligo loses is when the Tenant shuts down their account, but they've told me that happens 1-2 times a year out of tens of thousands of accounts. Tenants just don't think about it.
When you hold a large deposit, many tenants automatically write it off. They try to use it as last month's rent or fail to clean because they assume the Landlord is going to keep the deposit anyway (far too many Landlords do). When the Tenant has a billing authorization, they abide by the lease because they know you can take more money from them. They can't demand you apply the deposit to last month's rent. They won't leave the house filthy because they know it will cost them money out of their account. It psychologically changes the game and puts pressure on them to behave.
How does Obligo make money? If the average monthly payment is $10 and they have 10,000 renters signed up, that's $100,000 a month or $1.2 million per year. They collect almost all of the claims from the Tenant's bank account. They could lose $500,000 per year and still earn $700,000 per year. I suspect their numbers are even better than that.
The DIY Landlord Book4.7248 Reviews - 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Nathan Gesner:
@Ronda R. @Eric James @Jay Hinrichs @Warren A.
Just a follow-up.
Rhino is insurance. Pay the monthly charge, they cover losses. They do try to go after the Tenant to recover what they've spent, but they don't have direct access to tenant funds.
Obligo is a "billing authorization" which means the Tenant gives them access to a bank account and a credit card. When there are charges, Obligo pulls the funds from the Tenant's bank account or credit card. If the Tenant has a dispute, they fight with the Landlord, not Obligo. If the Tenant shuts down their accounts, Obligo still pays the Landlord and takes responsibility for going after the Tenant to recover the funds.
How does it work? Landlord determines the amount they want coverage for, typically the same as a traditional deposit. Obligo charges a monthly fee based on the dollar amount and Tenant's credit score. The Tenant charge is somewhere around $10 - $20 per month, so it's easy for the Tenant to absorb. If there are charges, Obligo pulls from the Tenant's account and makes the Landlord whole. The only time Obligo loses is when the Tenant shuts down their account, but they've told me that happens 1-2 times a year out of tens of thousands of accounts. Tenants just don't think about it.
When you hold a large deposit, many tenants automatically write it off. They try to use it as last month's rent or fail to clean because they assume the Landlord is going to keep the deposit anyway (far too many Landlords do). When the Tenant has a billing authorization, they abide by the lease because they know you can take more money from them. They can't demand you apply the deposit to last month's rent. They won't leave the house filthy because they know it will cost them money out of their account. It psychologically changes the game and puts pressure on them to behave.
How does Obligo make money? If the average monthly payment is $10 and they have 10,000 renters signed up, that's $100,000 a month or $1.2 million per year. They collect almost all of the claims from the Tenant's bank account. They could lose $500,000 per year and still earn $700,000 per year. I suspect their numbers are even better than that.
being an insurance product then they must get approved by the insurance commission in each state ? then prove they have deep pockets themselves in case there is a run on claims ? Sounds like a pretty genius bizz model.. They raise capital for the balance sheet lend it out like other insurance companies do on prime assets keep some liquidity for claims. I guess the only issue is for those with section 8 or basic C class or D class most those folks dont have a checking account. But for the top of the market I get that.. Kind of like the 1k deposit on a Air bnb where U can buy the same type of insurance for 50 to 70 bucks one time. I like this as a bizz model seems to me they will make a HUGE return ... So all you PM"s out there lets have a retreat and figure out how to do this ourselves :) I am game. - Investor · Waco, TX · Member since 2014 · 60 posts · 32 votes3y
Quote from @Jay Hinrichs:
Quote from @Nathan Gesner:
@Ronda R. @Eric James @Jay Hinrichs @Warren A.
Just a follow-up.
Rhino is insurance. Pay the monthly charge, they cover losses. They do try to go after the Tenant to recover what they've spent, but they don't have direct access to tenant funds.
Obligo is a "billing authorization" which means the Tenant gives them access to a bank account and a credit card. When there are charges, Obligo pulls the funds from the Tenant's bank account or credit card. If the Tenant has a dispute, they fight with the Landlord, not Obligo. If the Tenant shuts down their accounts, Obligo still pays the Landlord and takes responsibility for going after the Tenant to recover the funds.
How does it work? Landlord determines the amount they want coverage for, typically the same as a traditional deposit. Obligo charges a monthly fee based on the dollar amount and Tenant's credit score. The Tenant charge is somewhere around $10 - $20 per month, so it's easy for the Tenant to absorb. If there are charges, Obligo pulls from the Tenant's account and makes the Landlord whole. The only time Obligo loses is when the Tenant shuts down their account, but they've told me that happens 1-2 times a year out of tens of thousands of accounts. Tenants just don't think about it.
When you hold a large deposit, many tenants automatically write it off. They try to use it as last month's rent or fail to clean because they assume the Landlord is going to keep the deposit anyway (far too many Landlords do). When the Tenant has a billing authorization, they abide by the lease because they know you can take more money from them. They can't demand you apply the deposit to last month's rent. They won't leave the house filthy because they know it will cost them money out of their account. It psychologically changes the game and puts pressure on them to behave.
How does Obligo make money? If the average monthly payment is $10 and they have 10,000 renters signed up, that's $100,000 a month or $1.2 million per year. They collect almost all of the claims from the Tenant's bank account. They could lose $500,000 per year and still earn $700,000 per year. I suspect their numbers are even better than that.
being an insurance product then they must get approved by the insurance commission in each state ? then prove they have deep pockets themselves in case there is a run on claims ? Sounds like a pretty genius bizz model.. They raise capital for the balance sheet lend it out like other insurance companies do on prime assets keep some liquidity for claims. I guess the only issue is for those with section 8 or basic C class or D class most those folks dont have a checking account. But for the top of the market I get that.. Kind of like the 1k deposit on a Air bnb where U can buy the same type of insurance for 50 to 70 bucks one time. I like this as a bizz model seems to me they will make a HUGE return ... So all you PM"s out there lets have a retreat and figure out how to do this ourselves :) I am game.You can do it yourself in every state but Texas as I understand, which is where I am. I am still working on that.
- Investor · Waco, TX · Member since 2014 · 60 posts · 32 votes3y
Quote from @Patrick Pendley:
WE are now using it, but I have not had to make a claim yet. Tenants really like the option. WE upped out security deposit coverage from 1x rent to 2x rent when we implemented, and that has been pretty seamless. I have talked to some Professional (Larger) PM's than me. As I understand it the PMI Franchise is rolling this out to all of there offices. The message from Rhino is that they pay 100% of their claims. The PM's I have talked to that have experience with them said that they have never had a claim denied.
Here is a follow up. We are still using Rhino in some cases, but they have been denying claims and non-renewing many of our renters. When I was onboarded I was told they had never denied a claim in the history of the company. Also I was told that everyone we approved, they would approve. I think they have discovered that they need to be more careful with their underwriting than that and have started to pivot. We are currently looking at other solutions for this.
- 3yJay HinrichsBusiness MemberReal Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
Quote from @Patrick Pendley:
Quote from @Patrick Pendley:
WE are now using it, but I have not had to make a claim yet. Tenants really like the option. WE upped out security deposit coverage from 1x rent to 2x rent when we implemented, and that has been pretty seamless. I have talked to some Professional (Larger) PM's than me. As I understand it the PMI Franchise is rolling this out to all of there offices. The message from Rhino is that they pay 100% of their claims. The PM's I have talked to that have experience with them said that they have never had a claim denied.
Here is a follow up. We are still using Rhino in some cases, but they have been denying claims and non-renewing many of our renters. When I was onboarded I was told they had never denied a claim in the history of the company. Also I was told that everyone we approved, they would approve. I think they have discovered that they need to be more careful with their underwriting than that and have started to pivot. We are currently looking at other solutions for this.
Some of my Turnkey operator clients did the rental guarantee insurance and that company made it about 12 to 18 months before they folded as claims ran them out of money.. TK operators and landlords loved the idea but did not work for them vis a vi income and paying the claims. Also as I think through this renters by and large are not stupid when it comes to opening and closing and account.. I suspect if they are going to go wonky and feel a claim is coming their way from this company First-thing they do is close the account and open a new one at different bank. - Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes3y
Quote from @Tricia O'Brien:
I have heard about a company whose website is www.sayrhino.com that offers an interesting product. It allows tenants who don't have enough cash for a security deposit to get an insurance policy for $10-$20 per month that covers a $1000 security deposit. Then if the tenant misses a month's rent or there are damages at move out, the landlord files a claim through Rhino to get reimbursed. Has anyone used this? Were you successful in getting paid if you filed a claim? Did you have any issues with the tenants that quit paying the monthly fee? Any replies would be appreciated ! :)
This is the worst idea I have ever heard. Logical tenant screening 101 dictates that anyone we can't afford a security deposit should be denied.
Join the conversationCreate a free account to reply, vote on answers and follow this thread.