Rewards for Renting: The New Game of Landlord and Tenant

March 10, 2023

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What's important to know:

Several companies are already offering renters rewards programs, such as Stake, Up&Up, and Piñata, which provide benefits like cash-back for paying rent on time or renewing a lease and sharing home equity with tenants renting single-family homes.
The former CEO of WeWork, Adam Neumann, is launching a new property management company, Flow, which aims to give renters equity in the entire scheme, but the details of how renters will earn financial incentives are unclear.
Stake CEO, Rowland Hobbs, says that renters want cash-back, and that Stake has increased lease renewals by 30% for landlords. Piñata CEO, Lily Liu, says that their platform increases on-time rent payments by nearly 10%, improves renter sentiment, and helps renters build their credit scores.
RentSpree is a platform that helps landlords screen and place tenants, but it also has its own renter-rewards programs in place.
These renter-rewards programs aim to create incentives for both renters and landlords, driving up occupancy rates and lease renewals in the process. They also provide insurance against future volatility.

Fifth week of mortgage rate hikes

Mortgage rates have risen for the fifth consecutive week, edging closer to 7% due to the US Federal Reserve's suggestion that rate increases will continue to combat stubborn inflation.
Rates on 30-year fixed-rate mortgages averaged 6.73% for the week ending March 9, up from 6.65% the previous week and more than 2.8 percentage points higher than a year ago.
The robust economic data means the central bank will likely continue hiking its benchmark lending rate.
Rising rates have put a damper on the spring selling season, with prospective buyers delaying decisions until rates moderate.
However, first-time homebuyers may see robust demand, according to recent sales data.

Out-of-state real estate investors are turning to southern and Rust Belt cities due to rising costs of living and long-term price increases in coastal markets.
Metropolitan areas in Texas, Florida, Indiana, and North Carolina are emerging as target destinations for long-distance investors.
Data shows real estate investors are benefiting from above-average occupancy and rental rates under current market conditions, which play a key part in supercharging cash flow for portfolios.
Higher interest rates are pricing out would-be homebuyers, pushing them toward single-family rental homes, but also making it harder for investors to scale portfolios for purchasing more properties.
Institutional investors are focusing on the top 25 to 50 metropolitan statistical areas in the country, and both multifamily and single-family rental properties are popular choices for them.
The overall economic uncertainty of 2022 slowed the rate of institutional investors making purchases, calling into question how much of the market they will gobble up in the coming years.

Manhattan apartment hunters have been experiencing no relief from high rent prices. Last month, the median rent on newly signed leases was $4,095, only $2 lower than January.
Although prices typically drop in the cooler months, costs have held steady at near-record levels since July.
However, renters are starting to push back on renewal increases, with more new leases being signed this year than last year, and an increased number of units left on the market at the end of the month.
Meanwhile, landlords are trying to catch up with the market by aligning renewal rates with the prices they’re getting for new leases, prompting renters to look for new apartments.
Despite the increase in vacancies, landlords are not compelled to cut prices and instead are holding out for the busy spring and summer months.
Renters are hedging against future rent increases by signing longer leases, and the median rent in Brooklyn decreased by 2.8% in February from January. The median rent in Northwest Queens decreased by 3.9% from January.

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