Costly rental bond outlay foregone in fintech Trustbond revolution

Costly rental bond outlay foregone in fintech Trustbond revolution
Costly rental bond outlay foregone in fintech Trustbond revolution

With renting increasingly the new normal for many, an innovative fintech company has come up with a way to reduce the pesky rental bond payment.

The product, called Trustbond and created by the startup Traity, lets tenants avoid paying a traditional bond and instead pay a premium, which is a proportion of the rent paid for the term of the lease.

The innovative fintech company has partnered with landlord insurance specialist Terri Scheer Insurance to launch Trustbond.

Trustbond provides security to landlord without freezing the savings of tenants in a rental bond using world-first technology that "will ensure trustworthy Australians save thousands of dollars."

A traditional bond is a large sum that is tied up for the duration of the lease while Trustbond will allows tenant to pay a relatively small fee upfront to cover the protection their landlord required.

The Trustbond system will also allow estate agents and landlords to determine a person’s suitability as a tenant while providing landlords with the same level of protection as a traditional cash bond.

Trustbond is being launched initially in South Australia and it is expected will roll out to other states in the coming months. In NSW around 80,000 residential rental bonds, totalling $1.31 billion are held by the NSW Rental Bond Board.

The new product is marketed as a five step process:

  • Go to www.trustbond.com
  • Prove you are a trustworthy tenant by building your reputation profile
  • Replace the cash bond with a Trustbond
  • Share the Trustbond with your real estate agent or landlord for their agreement
  • Keep your cash in your pocket for when you need it most

Trustbond measures trustworthiness using online data including networks, ratings and reviews from Facebook, Twitter, LinkedIn, Airbnb, eBay and Uber to determine a tenant’s TrustScore.

Once eligibility has been established, the tenant pays an upfront fee that is a percentage of what a conventional rental bond would cost.

As a traditional cash bond might require a tenant to pay $2000, with Trustbond, the tenant might pay around $250 that still covers their landlord for the $2000, freeing up $1750 for the tenant.

The most recent census data revealed the trend towards renting as Australians renting increased from 29.6 to 30.9 per cent in 2016.

The inspiration for Trustbond came from the Traity CEO, Juan Cartagena's own experience of renting property.

As a new resident of the United States with no local rental or employment history, landlords were requesting rental cash bonds of up to $14,000.

He was untrusted as a foreigner, and his landlords requested very expensive bonds as they did not have enough information to trust him.

“Trustbond recognises a person’s digital profile as an asset, putting money back in tenants’ pockets to spend on the things that matter to them,” Traity executive Will Soutar, said.

“It allows people who may have an unconventional working life, such as freelancing, or who have no rental history, greater access to the property rental market.

“In addition to the financial incentives, Trustbond is a better way for tenants to show who they really are.

“It’s a way to build stronger relationships between tenants, landlords and property managers based on trust.”

Terri Scheer Insurance executive manager, Ms Carolyn Parrella, said there were key incentives for landlords to choose tenants who are eligible for Trustbond.

“Trustbond is based on the premise that good online citizens will also be good tenants. Only tenants with a high TrustScore are eligible,” Ms Parrella said.

“Trustbond gives landlords and property managers the ability to rate and review tenants.

“This encourages tenants to be responsible and motivates them to take care of their landlord’s property, in order to keep their TrustScore high.

“Landlords who use Trustbond can save time with automatic verification and screening, fill their properties faster by appealing to a broader pool of tenants and make better decisions for tenant selection.

“These benefits can be achieved with the same level of protection as a conventional cash bond.

“Trustbond covers the same breaches of a tenancy agreement including unpaid rent, damage, broken leases and associated costs, without the need to go to a tribunal.

“We want to take the stress out of investing for landlords, support tenants to feel trusted and remove barriers to entry for renting,” Ms Parrella said.

Visit www.trustbond.com to check your TrustScore and Trustbond eligibility.

Jonathan Chancellor

Jonathan Chancellor

Jonathan Chancellor is one of our authors. Jonathan has been writing about property since the early 1980s and is editor-at-large of Property Observer.

Tags: 
Rental Bonds Trustbond

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