A company in the US is now enabling tenants to pay their rent in bitcoins, which has the potential to significantly increase the currency’s use.
Rentalutions was co-founded in Chicago by Ryan Coon as an online property management platform to help landlords vet potential tenants and look after their properties, plus enable tenants to pay their rent and request maintenance work.
The company, which operates across all US states, was established in April 2012, not that long before Coon started taking an interest in bitcoin.
“My co-founder Laurence Jankelow and I watched the value of bitcoin spike earlier this year and have been watching the recent regulatory issues. It has become obvious to us that digital currencies will play a role in our economy for a long, long time,” Coon said.
He went on to say Rentalutions decided to add bitcoin as a payment method for tenants because his team believes it will continue growing in popularity and become a more widely accepted currency. “As more people become comfortable with the currency, we expect individuals will want to use it to pay for things they need, including rent.”
“Our decision to accept bitcoin was driven by our desire to anticipate our customers’ needs.”
A few tenants have already been in touch about the possibility of paying in bitcoin and someone has requested that the company also starts accepting Litecoin, which Coon and his team are now looking into.
Austin Craig who, along with his wife Beccy, is partway through creating a documentary on living on bitcoin for 90 days, said paying rent has proved to be a rather large problem.
Earning the trust of his landlord took a while: “If my suggestion to pay in a cryptocurrency hadn’t been legitimized by a whole camera crew and an official Kickstarter campaign, I’m sure he would have flatly refused. In the end, it took over two weeks to negotiate the terms.”
The couple managed to convince their landlord by agreeing to pay a higher level of rent, but he obviously still has his reservations about digital currency, as he opened up a new bank account to accept fiat deposits from Coinbase so bitcoin doesn’t have any connection to his other accounts.
“These days, our landlord is totally fine with the arrangement. Once it’s set up, bitcoin is totally painless. It’s faster than a check in the mail, and it’s cheaper than a credit card. He just didn’t want to go through the trouble of setting up ‘one more thing’,” Craig told us.
“That said, he may have been the kind of person who would be amenable to something like Rentalutions, assuming that the company took care of the ‘hassle’ of setting up bitcoin payments.”
Currently, tenants can’t pay in bitcoin directly via Rentalutions’ website, they have to email the team with the amount their rent is in USD, then Rentalutions sends the tenant an invoice through Coinbase.
“If the landlord is using our system, we will deposit the funds directly into the landlord’s bank account. If the landlord is not on our site yet, we will mail him or her a check, which is pretty old school!” Coon explained.
Landlords can also receive the rent payment in bitcoins, if they prefer.
If both the landlord and tenant are signed up to Rentalutions, the tenant will have to pay a 3% fee, but if the landlord is not signed up, the fee will be 5%. Coon said he is “actively looking for ways to bring these down” and hopes, eventually, to be able to eliminate them.
One bitcoin user, who asked not to be named, said: “I love the idea of being able to pay my rent in bitcoins, but if doing so would cost me more than paying in dollars would, I don’t think I’d do it.”
Landlords signed up with the company have to pay between $5 and $150 per month depending on the level of services they want to receive. Currently, there is no option for landlords to pay these monthly fees in bitcoins, but Coon said he hopes to set this feature up in the near future.
Earlier this month, Brigham Young University Idaho-approved housing company EdgeCreek Property Management announced it was allowing students to pay their deposits and rent in bitcoin.
Employee Daniel Larson said he has received a few enquiries about paying in bitcoin, but has received no payments as of yet. There may not be a huge demand for paying rent in bitcoins at the moment, but enabling people to do so is a big step for digital currency.
Image credit: FernandoEscher