Rent-to-Own 2.0

Rent-to-own had a nasty reputation in the past complete with racist redlining and bait-and-switch schemes. A new generation of rent-to-own startups is successfully battling that rep as well as a wobblier housing market — and major investors are noticing. Also, the predictability of multifamily vs. the uncertainty in such commercial real estate assets as office and retail has proptech pouring into the space. Get a jump on this new trend.

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— Tom Acitelli, Co-Deputy Editor

Rent-to-Own Startups Confront Rising Demand and Dwindling Asset Values

Spiraling housing prices, surging mortgage rates, and buyers saddled with student debt — the already gloomy homeownership picture for young adults has, somehow, gotten bleaker in the recent downturn. The deferral of the American dream is even fueling a new class of rent-to-own startups, which have emerged in recent years to provide alternative paths to equity, ownership and wealth. These startups have attracted funding from the likes of Goldman Sachs, Fifth Wall and Sequoia Capital, and now need to recalibrate to ride out an increasingly tricky market.

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Proptech VCs and Principals Swoon Over Multifamily's Predictability

Vetting applications, coordinating appliance repairs, collecting rent. It’s hard not to get bored by the day-to-day routines of most rental operators. But in real estate right now — with a ballooning cost of capital, wider economic unpredictability and hurdles for home ownership that have grown even higher — the bland predictability of recurring rents and stable income has made these assets, and the tech bolstering them, more attractive. “It’s not necessarily that rental is doing any better than the rest,” said Ryan Waliany, co-founder and CEO of Doorstead, a tech-enabled property management service for landlords that helps find tenants. “It’s more that it’s not falling. It’s very, very stable.” Boring, it seems, is booming.

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