By Philip Russo
Image credit: Drew Angerer / Getty Images
Jetty announced today that it has launched Jetty Rent, a new product designed to give tenants flexibility in paying their monthly rent. Jetty Rent was developed and brought to market with the backing of a new $23 million equity financing round from investors that include Citi and Flourish Ventures, according to a statement from Jetty.
Having initially created Jetty Deposit, a product that helps renters replace an expensive security deposit with a low-cost monthly policy, the fintech-meets-proptech firm has now set its sights on monthly rental payments, said Mike Rudoy, co-founder and CEO at Jetty.
“The next big problem that we saw was that renters were facing, basically, a liquidity challenge,” Rudoy said, “especially with folks that might be in the gig economy, who might be living paycheck to paycheck and might have unexpected bills that come up.”
Rudoy continued: “If they don’t [have the rent], they’re typically hit with a high late fee that can oftentimes compound and lead to chronic delinquency, abandonment and eviction. That is the problem that we are trying to solve with Jetty Rent. We are trying to provide renters with financial flexibility to pay their rent on a schedule that works for their lifestyle.”
Jetty Rent works on a monthly subscription model for renters, starting at $15 a month, Rudoy said. “If you think about what a typical late fee is, it could be upwards of 8 percent of someone’s monthly rent. So, $15 as a starting point is well below that, if you think about the average rent in the country being $1,200. For that $15 a month, the renter is now able to pay their rent up to 24 days into the month to Jetty, while we pay the property manager 100 percent of the rent on the first of the month.
“So, unlike a payday loan, where you have extremely high [annual percentage rates], and the cost of that loan actually goes up over time if you are delinquent, our product does not charge interest fees for late payments. You can think about it as a flat monthly subscription.”
Jetty Rent is a month-to-month product, Rudoy said. “If the renter does not pay us within those 24 days, we won’t give them the opportunity to use Jetty Rent for the subsequent month, until such a point that they pay us back or make us whole on that payment. As soon as that happens, they can come back onto the program. And so, we think that there’s actually a level of financial discipline that is embedded in the product design. Unlike a credit card, where people can rack up debt by putting their rent on their card month over month, this simultaneously provides flexibility, but also makes sure that they are paying off the product.”
Jetty cited data from the National Multifamily Housing Council (NMHC) that said in the first six months of 2021, an average of 21 percent of renters failed to pay their rent by the sixth of the month, a cutoff date that would typically trigger late fees from property owners. The federal eviction moratorium restricted the charging of late fees, but with the moratorium now partially lifted, many renters will once again be facing this financial challenge.
The other thing that Jetty Rent is attempting to do is help property managers improve their cash flow, said Rudoy. Property managers are able to receive 100 percent of the rent on the first of the month, as well as improve their renter experience. “No longer are they going to be chasing after tenants to receive rent payments. Now, they are giving renters the ability to pay on their own schedule. Ultimately, we are trying to solve a delinquency abandonment and eviction problem, which is a huge cost burden and legal liability for property managers and owners.”
To launch Jetty Rent, the company partnered with Cortland, a top 20 real estate investment, development and management company, and rolled out the offering to residents across a portfolio of properties.
“At Cortland, we’re focused on improving the resident experience, and the process of paying rent is a massive part of that,” said Jonathan Kirn, director of ancillary services at Cortland. “Jetty Rent makes life easier on our residents and takes the burden of rent collection off our shoulders — it’s a true win-win.”
“Embedded finance platforms like Jetty are quickly becoming one of the most influential technology trends taking place around the world — one where the customer’s experience with such things as online payments and loans comes first,” said Emmalyn Shaw, managing partner at Flourish Ventures. “We’re thrilled to back the Jetty team as they continue to develop their fintech platform and product offerings to help reach those who need relief and flexibility with meeting housing costs.”