Problem 1 - the risk (and the empty apartments!)
The main problem of the rental market essentially boils down to dealing with strangers. Having a stranger live in your apartment always carries a risk. Renting your home from a stranger as a tenant is also always risky. How is this risk currently handled? Mostly just gut feeling, former experience and a security deposit.
Even more, some landlords even mitigate the risk by just not renting out their property and keeping the apartments just as investments. On the one hand that’s understandable from the perspective of wanting to secure your money with less risk, but on the other hand, this is creating a more and more burning societal problem where people are unable to live decently anymore (and that’s what housing is meant for).
When talking to landlords who rent out, a lot of the times they seem to find that the security deposit is the best solution for the risk problem. The deposit can just be increased to 2-3 times the monthly rent and it seems that it’s a pretty viable option for risk mitigation. Yes, sometimes this works, but there are a couple of issues with this solution as well.
There are not many people who can pay 6000-9000 zloty at a given time, especially in this economic climate. This means that the amount of potential people who can live in an apartment just dries up. Moreover, asking for a huge down payment often actually increases the risk for the landlord as people might borrow that money from friends (or even worse, credit companies with huge interest rates), leading to problems soon.
It’s just unfair towards the tenant. Empathy is a dying value in today’s world, but imagine paying a large portion of your salary (or in some cases a full monthly salary) just as collateral in addition to other costs you have for having a home to live in. You can be a cynic and say that it’s just the way the world is, but does it have to be? Having a place to live in at a normal cost is a basic human right.
To solve the risk problem we should likely just step away from the deposit (which is hard, because who wouldn’t like cold hard cash as a guarantee, right?) and reconsider why we are worried about renting to strangers. Are we scared of being left alone with a problematic tenant with no solution, losing money and effort for redesigning, cleaning and renovation or something else? Because deposit only solves a small portion of these problems. But before proposing a possible solution, let’s take a look at the second problem.
Problem 1 - the risk (and the empty apartments!)
The main problem of the rental market essentially boils down to dealing with strangers. Having a stranger live in your apartment always carries a risk. Renting your home from a stranger as a tenant is also always risky. How is this risk currently handled? Mostly just gut feeling, former experience and a security deposit.
Even more, some landlords even mitigate the risk by just not renting out their property and keeping the apartments just as investments. On the one hand that’s understandable from the perspective of wanting to secure your money with less risk, but on the other hand, this is creating a more and more burning societal problem where people are unable to live decently anymore (and that’s what housing is meant for).
When talking to landlords who rent out, a lot of the times they seem to find that the security deposit is the best solution for the risk problem. The deposit can just be increased to 2-3 times the monthly rent and it seems that it’s a pretty viable option for risk mitigation. Yes, sometimes this works, but there are a couple of issues with this solution as well.
There are not many people who can pay 6000-9000 zloty at a given time, especially in this economic climate. This means that the amount of potential people who can live in an apartment just dries up. Moreover, asking for a huge down payment often actually increases the risk for the landlord as people might borrow that money from friends (or even worse, credit companies with huge interest rates), leading to problems soon.
It’s just unfair towards the tenant. Empathy is a dying value in today’s world, but imagine paying a large portion of your salary (or in some cases a full monthly salary) just as collateral in addition to other costs you have for having a home to live in. You can be a cynic and say that it’s just the way the world is, but does it have to be? Having a place to live in at a normal cost is a basic human right.
To solve the risk problem we should likely just step away from the deposit (which is hard, because who wouldn’t like cold hard cash as a guarantee, right?) and reconsider why we are worried about renting to strangers. Are we scared of being left alone with a problematic tenant with no solution, losing money and effort for redesigning, cleaning and renovation or something else? Because deposit only solves a small portion of these problems. But before proposing a possible solution, let’s take a look at the second problem.
Problem 1 - the risk (and the empty apartments!)
The main problem of the rental market essentially boils down to dealing with strangers. Having a stranger live in your apartment always carries a risk. Renting your home from a stranger as a tenant is also always risky. How is this risk currently handled? Mostly just gut feeling, former experience and a security deposit.
Even more, some landlords even mitigate the risk by just not renting out their property and keeping the apartments just as investments. On the one hand that’s understandable from the perspective of wanting to secure your money with less risk, but on the other hand, this is creating a more and more burning societal problem where people are unable to live decently anymore (and that’s what housing is meant for).
When talking to landlords who rent out, a lot of the times they seem to find that the security deposit is the best solution for the risk problem. The deposit can just be increased to 2-3 times the monthly rent and it seems that it’s a pretty viable option for risk mitigation. Yes, sometimes this works, but there are a couple of issues with this solution as well.
There are not many people who can pay 6000-9000 zloty at a given time, especially in this economic climate. This means that the amount of potential people who can live in an apartment just dries up. Moreover, asking for a huge down payment often actually increases the risk for the landlord as people might borrow that money from friends (or even worse, credit companies with huge interest rates), leading to problems soon.
It’s just unfair towards the tenant. Empathy is a dying value in today’s world, but imagine paying a large portion of your salary (or in some cases a full monthly salary) just as collateral in addition to other costs you have for having a home to live in. You can be a cynic and say that it’s just the way the world is, but does it have to be? Having a place to live in at a normal cost is a basic human right.
To solve the risk problem we should likely just step away from the deposit (which is hard, because who wouldn’t like cold hard cash as a guarantee, right?) and reconsider why we are worried about renting to strangers. Are we scared of being left alone with a problematic tenant with no solution, losing money and effort for redesigning, cleaning and renovation or something else? Because deposit only solves a small portion of these problems. But before proposing a possible solution, let’s take a look at the second problem.
Problem 2 - the costs
In Poland and almost all other countries, the cost of living crisis is making people rethink their behaviour. It is happening to such an extent that even big organisations such as the International Monetary Fund highlight the cost of living crisis as one of the most burning recent global problems.
The costs are impacting the rental market in multiple ways. On the one hand, many private people and corporate landlords who have used loan money to buy property struggle to make sense of their financial decisions. This means that they either have to accept the monetary loss or try to increase the price. That means that in addition to the risk of having a bad tenant, the landlords now have a financial risk that is looming over their heads.
On the other hand, due to less purchasing power, the tenants are becoming increasingly price sensitive, often choosing cohabitation (living together in a single apartment) or other apartments that are not as expensive. That means that the willingness to pay is going down even more, ironically leading to even less money a landlord can usually make because the tenants will just choose cheaper properties. This in turn makes less landlords rent out their properties as the risk-benefit ratio is high.
Taking the risk and cost into account, it’s evident that these 2 together are making life in the Polish renting market increasingly difficult for both tenants and landlords. The tenants are struggling to find a rental home that would be fitting for their budget, while the landlords have increased risk from both the perspective of the market, but also the historic risks of renting to strangers.
Problem 3 - how to move forward?
All of these problems lead to pessimism in the market. What is the solution? The state is already thinking of some solutions, such as once again drafting up another iteration of the “starter housing loan”, the former version of which had a significant (although not necessarily positive) impact on the rental market due to the subjectively drawn lines on which people qualified for these loans.
Regarding the risk, it is quite similar - technically if something arises, the problems can be solved in court, but this is expensive, annoying and time-consuming, meaning that most of the time people don’t even turn to the courts anymore with renting-related cases and have just learned to live with the loss either in the form of damages or lost rent or deposit confiscated by an upstart landlord.
Solution? Take part in a positive revolution
Thousands of landlords and tenants in Poland and the Baltic States have already decided that they’re fed up with the way the current system works and have joined Rendin to create a better renting system that is fairer, less risky and allows both parties to have more money. It is not just another agency, middle-man or management company that takes a cut of the earnings but a completely new way of handling renting.
Here’s what Rendin includes:
Automated financial background check for the tenant to mitigate the risk. As a fair exchange, the tenant gets to rent deposit-free if they get a positive result. It takes just a couple of seconds to do the check fully automatically and requires minimal data that is securely stored. To solve the problem of trust in the rental market we have to cut out the people who are systematic debtors while rewarding people who are financially responsible, allowing them to keep the deposit money in their pockets.
Additional protection for the landlord and tenant. This means that we take a huge portion of the risk. We should live in a world where we can trust each other without worrying about all the potential bad cases. We take responsibility for our process by paying up for the damages if necessary to the landlord should the tenant not take responsibility for their actions. We also ask as a mediator, should the parties get into disagreements over the damages, terminating the agreement etc.
Much lower costs for the tenant. Regardless of who’s paying for the service (more on that below), it’s a monetary win. Most Polish rental agreements are signed for 1 year, meaning that even if a tenant pays for the service, with our 2.5% monthly cost they would only pay 30% of the full 1-month rent deposit. This number goes even lower if we consider 2 or 3 monthly rent’s worth of deposit. Plus, it’s conveniently divided over a longer period.
Lower costs for the landlord too! We have our dedicated listing system and by adding your property, we include it in a pool of properties that we advertise on Facebook in bigger cities in Poland. That means that you don’t have to spend several hundred zloty to put up an ad to listing sites. Setting up a listing with Rendin is completely free.
However, we can’t do all of that completely free. We have tried to produce a fair pricing model with the cost of using Rendin being 2.5% of the monthly rent for an agreement signed, which can be paid by either the tenant or the landlord.
Ready to make the world of renting a better place? Find your rental home or add your property here.