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Stake it, till you make it.
The combination of an eviction moratorium and a fall in demand for rental properties (at least in some areas) means that property owners need to get creative in finding ways to attract tenants and motivate them to pay rent on time. There are many ways to draw potential leads into your marketing funnel and convince them to rent, but this week’s startup came up with a very compelling offer… a loyalty program for your rental property.
Stake helps owners in setting up a cashback loyalty program for their building, constructing a formula that perfectly aligns incentives for both occupants and property owners. As a tenant, paying the rent on time feels less like a waste of money and more like an investment, building up additional savings. The upside for the owner comes in the form of less administrative burden, including associated costs of follow-up, and a decrease in churn and related broker and marketing costs.
Imagery courtesy Stake.rent
Stake is a technology provider, they offer both a client-facing mobile app and a cloud based management platform for the property manager. Stake doesn’t claim to know what the recipe of the perfect cash-back program for a building is. The software can be used to create a specific offering, including setting custom rewards, making it work for every specific building and every neighborhood.
Stake was founded in 2018 bij Rowland Hobbs and Jimmy Jacobson. They started beta testing in NYC and quickly found out that cash-backs can be a powerful tool in managing rental communities. In November 2020 they joined the Multifamily Technology Accelerator founded by Shadow Ventures, which led to the $4m seed round they closed in September 2021.
🕵️♀️ Who else?
Stake’s approach is quite unique, yet we found some other interesting startups that are working towards bringing loyalty programs to real estate.
For example, the British corporation My Rent Reward is building a loyalty program for tenants, but instead of rewarding you for paying the rent on time, they reward users for their shopping expenses among their partners and use those funds to pay the rent.
KeyChain Pay a startup from Hong Kong offers a smart rental payment platform offering 5.6% credit card rewards to tenants. The advantage of using this type of service compared to using a classic credit card scheme through e.g. plastiq is that a service specifically aimed at the rental sector often provides a fee structure that is optimized for handling larger payments.
Another rental reward system is the Bilt Rewards program. Tenants get rewarded for paying rent on time and can spend loyalty points with selected partners. Payments can be paid via the app, or via the specific Bilt Mastercard. Bilt launched in Juni 2021, coming out of the startup studio led by Ankur Jain. Partnering with major property owners, the program is already rolled out across over 2 million rental units.
Piñata takes a very playful approach to a rental rewards program, offering a free and universal service (the building owner of your rental unit doesn’t need to be signed up to be able to subscribe). The app offers rent rewards, includes a digital marketplace offering cash-back partner deals, improves the tenant’s credit score when rent is paid on time, and even has an in-app-game where you can unlock additional rewards.
Imagery courtesy Pinata.ai
Customer loyalty programs are a mainstay in traditional retail en commercial environments, so it’s kinda surprising that the concept hasn’t made a crossover to residential rental real estate sooner. Apart from financial savings, the ability for a landlord to be able to nudge behavior with rewards could, when used tastefully, lead to better neighborhoods.
For a tenant, the additional financial buffer can be a step to homeownership when the savings can be pointed towards a home down payment.
👎 Why not?
It remains to be seen whether rental reward programs can lead to more financially secure communities, or whether the technology will be used by landlords to de-risk their business model by leveraging it as a de-facto late fee. Extra attention should also be paid, preventing that the custom reward structure is used to incentivize unwanted behavior.
📚 Further reading?
Hard to resist a good stake (unless you’re a vegetarian)!