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With skyrocketing rental prices, the tenant-landlord relationship is becoming increasingly divisive. In this episode, we discover how RentFund, led by founder and CEO Thomas Deneve, is revolutionizing the rental landscape by incentivizing tenants to take better care of properties through a unique financial approach, fostering a win-win scenario for landlords and renters. Thomas explains RentFund’s streamlined rent collection process, with an emphasis on security and privacy, and shares the company’s aim to eliminate transaction fees altogether. Tune in for insight into the future of the rental industry, and RentFund’s role in shaping the way we rent and invest in properties across Canada.
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“In this industry, it’s always been tenants versus landlords and they have always been butting heads and there’s always been this kind of tenants have the more power or the landlords have more power and you always see this clash happening. So what we’re providing in the market is a win-win solution for both sides.” - Thomas Deneve
[0:00:16.3] ANNOUNCER: Hello, and welcome to Sync or Swim, a weekly podcast, brought to you by Rentsync, where we take a deep dive into the PropTech, multi-family, and rental housing industry. In each episode, we uncover the technologies and strategies used to help overcome operational challenges and increase the value of your multi-family investments. So let’s get into our conversation today.
[0:00:40.5] MH: Welcome back to Sync or Swim, the podcast where we take a deep dive into the PropTech, multi-family and rental housing industry. I’m your host, Matt Hildebrand. Also joining us again, Giacomo Ladas, communication manager at rentals.ca. Giac, how’s it going today?
[0:00:55.9] GL: Pretty good Matt, thanks for having me back.
[0:00:57.1] MH: Always happy to have you. So today, we are joined by Thomas Deneve, founder and CEO of RentFund. Thomas, welcome to the show.
[0:01:06.1] TD: Hey, thanks for having me, it’s awesome to be here.
[0:01:08.2] GL: So Thomas, we always start off the show, you know, for any listeners out there that don’t know about RentFund, hoping you could provide our listeners with a little overview of RentFund and what inspired you to start a company like this.
[0:01:22.4] TD: Yeah, I think to keep it simple, Matt, basically, the problem that we’re looking to solve is, it’s a very common problem that landlords have and anyone in this industry probably has had or is going to have me be in the future is property damage.
It’s a very costly thing and I was a landlord and I faced this problem and as well as a lot of the other landlords that I had known, they were facing this challenge as well and a lot of times, there’s – you can ask for damage deposit. Typically, you can screen tenants and you try to find the best tenants but sometimes, that just doesn’t work.
So there was – I started to do some research and look and see if there’s any other solution for this and there wasn’t. So what RentFund does is it incentivizes tenants to take better care of properties by giving tenants back a portion of each rent payment and holding it in an investment for the period of the time that they’re renting.
And what this does is it helps tenants benefit financially from their biggest monthly expense, which is their rent but it also incentivizes them to take better care of the property that they’re renting because now, instead of just being a renter, they actually start to feel like an owner because they have a piece of the pie as well if that makes sense. So that’s kind of, in a nutshell, what it is and the problem that we’re solving.
[0:02:31.9] GL: Well, that’s great Thomas, because as we know, right? The tenant-landlord relationship can get pretty divisive at times more so than ever now with the way that rent’s going and the prices that we’re seeing and because of that, we know that maintaining that positive relationship between tenants and landlords is so crucial.
So could you get into a little bit of how RentFund approaches that dynamic between tenants and landlords and especially when it comes to these financial matters?
[0:02:53.7] TD: So just like you said Giac, in this industry, it’s always been tenants versus landlords and they have always been butting heads and there’s always been this kind of tenants have the more power or the landlords have more power and you always see this clash happening. So what we’re providing in the market is a win-win solution for both sides.
Like I said, landlords are happy because they have better quality tenants that take better care of the property and tenants are happy because, well, they’re able to benefit from their biggest monthly expense and a lot of people, especially right now, like you just said, like with the economy and especially in Canada, and even in the United States, over 56% of Canadians live paycheck to paycheck and they’re not able to save anything for their future, right?
Over 54% of Canadians, when they go to retire, and these are old statistics, mind you, like this is – it’s getting worse. The younger generations, it’s actually even worse. So these are kind of old stats but 54% of Canadians when they go to retire, they have nothing saved for retirement so they can’t retire and there is a new statistic that came out recently, which was basically, nine million Canadians that rent believe that they’re not ever going to be able to own.
They will have to rent forever. So there’s a lot of people that have lost hope and I think with RentFund, what kind of the approach that I wanted to take is to try and give some people hope back that they could eventually maybe build something up for themselves and their family, and then, own something and live that dream of potentially buying that home in the future because they were able to put some money away, right?
And just a lot of people are in that position. I kind of went off topic there Giac, a little bit but the question that you asked was how is RentFund kind of approaching the transaction, I guess, the relationship between these people. So from a more technical aspect, I guess, what we provide is a payment application for landlords and tenants so tenants can pay the rent through RentFund’s application and landlords can collect the rent through the application and it’s pretty simple.
You just would download it and then you can just start paying your rent through the platform and then landlords can download it and start collecting their rent through the platform. So yeah, hopefully, that answers your question.
[0:04:53.5] GL: No, for sure.
[0:04:55.2] MH: Yeah, it’s really good too. I mean, in today’s digital age, you know convenience is crucial, always looking for you know, ways to automate and streamline things. I was going to ask you about some of the technical stuff there, you kind of answered but what are some other ways that RentFund is enhancing the rent payment experience for tenants and landlords and you know, what are some of the feedback you’ve received from them so far?
[0:05:16.1] TD: That’s a good question, Matt. Some of the things that we are looking to do something that we’re going to be adding to RentFund is actually a way to – our whole goal is to try and make the platform free to use. So like literally, you can sign up and just continue making the same payment that you’re making today, except, you get a financial benefit from it now because you’re paying through RentFund and it’s a journey to get to that stage.
But we have a really good strategy in place to get there and one of the things I can kind of share on that, I can’t share too much about it because we’re in development of that right now but one thing I can share is that we’re going to be able to eliminate transaction fees altogether. So you’ll be able to pay with a credit card, a Visa card, any of that stuff, and you’ll be able to have no transaction fees, which will be amazing for people.
Because they cannot only cash in on the points from their credit card and get rewarded for that but they’ll also be able to get the financial benefit from the portion of the rent that they’re getting back as well. So that’s going to be a really cool thing that we’re going to be releasing soon that we’re working on and we’re developing and we have a way to accomplish that.
So that was a big thing for us and our users is eliminating a lot of those internal transaction type fees and now we have a solution for that. So I think it’s going to make the product even more accessible too to more people.
[0:06:29.2] MH: I couldn’t agree more with that, I always hate those transaction fees.
[0:06:32.8] TD: Yes.
[0:06:34.0] MH: Now, on that topic though, you know, security and privacy are paramount when dealing with financial transactions, you know, especially in the rental housing industry right now where scams are prevalent. They’re coming up left, right and center. So I mean, how is your platform and how does RentFund ensure the security of both landlords’ and tenants’ information and payments when using the platform?
[0:06:55.4] TD: Yes, so one of the things that we do is we have all the money that comes through RentFund is ensured. We’ve got a partnership with RBC. So all the transactions that actually come through there, it’s a certain type of insurance, I can’t remember what it’s called. I think it’s called CIDI or something like that and what it is, it’s basically an insurance policy on the money.
So that’s how we protect the capital that’s being processed through the platform. As for like, privacy and stuff, we comply with all the privacy regulations in Canada and when we go and move to the US or when we start scaling into the US, we’ll be doing the same thing down there. I’ve been fortunate to be able to work with some pretty amazing lawyers around, like with what we’re doing.
So I think we have a really good handle on not cheap working with the good guys but I knew that this was the type of product that we needed to have some really good legal structure because we’re dealing with something that is very intimate to people, which is their privacy and also their payments, which is finances and also private information. Those are two very personal things and we have to be very understanding of that and we have to be very cautious of how we approach it and we have to do it the right way.
Even if it’s expensive and it takes more out of our pocket to do it, we got to make sure we do it the right way so that it benefits the users long-term.
[0:08:06.9] GL: Yeah, Thomas, I think that actually goes nicely into our next point I want to bring up because I mean, when we talk about investments, right? I’m sure a lot of people to come like there’s an inherent risk with it, right? And I’m sure there are some people who obviously like to invest their money but some are a little bit more cautious with some of those things.
So how does RentFund kind of approach that risk management and what steps are you taking to ensure, I guess, the sustainability of these financial solutions, so people can kind of do this without having the inherent risk always kind of clouding their mind throughout the month?
[0:08:35.3] TD: Yeah, that’s a really good question. I think that one of the biggest things that we’re focused on is simplicity of like product itself to make it really easy for people to use so there’s no friction. I thank there’s a lot of people, I think the reason we see the numbers so high with people that don’t have any money saved for retirement is not because people don’t know that they should be saving.
A lot of people when you talk to them, they know they should be saving but they’re not saving, and why is that? Sometimes, it’s just because they literally can’t because they’re living paycheck to paycheck and other reasons is because they just don’t want to take the time to go and set up the savings account and choose the investments and do all the steps required to get that set up.
So one of the things for us is making that as frictionless as possible for people and then also providing the education and the help for people because financial literacy is not taught in school, it’s not taught in society the way it should be and what we’re going to do is, we’re going to try to teach our users by providing that information so that they can make accurate and good financial decisions for themselves.
And we’ll just be providing the information for them to do it and then try to make that process as simple for them to do after they have an understanding of how to do it and what they want to do, and make it as easy as possible for them to do so they actually take action and then actually do it. So that’s kind of how we’re approaching that, that’s a really good question.
[0:09:57.5] MH: Now, I want to go back a little bit. I know we’ve talked about kind of the – how the payments will work a little bit, safety, and security, the automation of it all but from the top, you mentioned, you know a used case property damage. So I mean, right on the website and as you're always saying in you’re messaging, you know, helping landlords and property managers and tenants with rent collection and bridging that gap.
I mean, could you elaborate on some of the common challenges landlords are actually facing when it comes to rent collection.
[0:10:26.9] TD: There’s a bit of a problem but I would say the main one that we’re focused on is just the consistency of it, making sure that it’s consistent on the same day, every single month and then automating that process to make it simple for landlords.
A lot of these bigger property management companies, they have systems in place for that but the smaller landlords that have, let’s say, three to five properties, which is a majority of the market, those guys, typically, they’re requesting e-transfer, they’re either doing direct withdrawal, something of that sort or they’re collecting a check.
So it’s crazy, people still use checks today and when we’re doing market research, I was amazed to see how many people actually are still using checks to pay their rent and collect rent. Anyway, so what we’re doing to kind of solve that is, make it as simple for them to be able to collect that rent so that they’re not having to manually do it all the time because these landlords, they also have lives.
A lot of them have jobs, they got families, they are out travelling, and going on vacation. They don’t have time to always be contacting their tenant, reminding their tenant saying, “Hey, your rent is due, your rent is coming up” and honestly, sometimes, people just forget to pay, like, that’s just people just forget.
So we’re going to try and automate that process to make it as simple as possible, automate notifications for landlords to simplify the collection of the rent, to let people know like, “Hey, in seven days, your rent payment is going to be coming out, make sure you’re ready” and then when the rent payment actually comes out, it automatically is going to happen so the landlord doesn’t have to manually think about it every month.
That’s one of the major ways that we’re going to be helping these smaller type mom & pop and like, even the medium-sized landlords, this will help them a lot with their rent collection process just by adding that and then also offering some other payment options. So like I said, we’ll be offering people to allow them to pay with their credit cards if they want to.
We’ll be allowing them to pay with direct withdrawal, I will be allowing them to pay with e-transfer. Those are the three main options that we’re going to be offering and that’s also going to help landlords be able to collect their rent. We find that when people pay the rent with a credit card, they typically make the rent payments on time all the time.
So it’s pretty crazy and you would never think that, so that’s kind of some of the ways that we’re going to solve some of the problems that the landlords are having when it comes to collecting rent.
[0:12:37.2] ANNOUNCER: Like what you hear so far? Make sure you never miss an episode by clicking the subscribe button now. This podcast is made possible by listeners like you. Thank you for your support. Now, let’s get back to the show.
[0:12:51.8] MH: And then another big used case you mentioned was you know, minimizing the risk of property damage. You know, rewarding good tenants. What kind of brought you to that conclusion and why making it such a big part of the RentFund pitch?
[0:13:08.0] TD: So with the right incentive, we believe that a lot of people will do anything with the right incentive. So in order for you to get people to take care of the property, with the right incentive, someone is going to make sure they maintain the property well, they clean it, they’re organized, and because they want to make sure that they get that incentive back, right?
Some people will require a bigger incentive and some people not so much and that’s up to the landlords to decide what amount of incentive they want to give back and another thing, too, is with turnovers, it is also another big problem landlords face and a lot of landlords know the cost. Another thing that we learned in our market research is there is a lot of landlords out there that are actually losing money every month but they know they have a good tenant.
So they are willing to lose money to keep that good tenant in the property, it’s crazy and I was amazed at how many landlords were actually doing this. A lot of them, so – because they know the cost associated with having a bad tenant, and that damages the property and they would just rather keep the good tenant and lose a couple hundred bucks a month and they’re okay.
So that was an interesting thing that we kind of learned about the landlords as well is that they’re already basically incentivizing their tenants already. So what we’re doing is we’re stepping in and offering an incentive that is not just a discount because we’ve had landlords say, “Well, what if we just discounted our rent and we just instead of giving them back let’s say 5% or whatever it is, we just discount the rent 5%.”
Well, the reason that you wouldn’t do that is because now it’s not an incentive. It is not a good incentive because you have discounted your rent and now if they damage the property, there is nothing holding them accountable whereas when you use RentFund, it goes into an account that collects interest and it grows over time and you don’t get access to that money until the landlord releases it, right?
So now, instead of just being a discounted price, you have to be a good tenant over a period of time, over the period of time that you’re renting so it creates this feeling of like, “I want to get this thing that I’m putting money into and I see it growing” like you can see the money growing in the application. So every month, you make your payment it’s going up more and more and more.
You’re going to want to make sure that you consistently take care of the property month by month, right? So that’s kind of why we’ve decided to use the incentive and then the other problem like I said, over 30% of people’s income goes towards their rent. Typically, depending on where you are, like if you are in Toronto, rents are very high or if you are in Vancouver, anywhere in BC really right now rents are very high, right?
So the incentive was basically to solve the problem of helping these people try to get out of this kind of cycle of they call it the wealth gap. So there’s like landlords are getting richer, tenants are getting poorer and there is this big gap happening and what we’re trying to do is help both sides and we’re trying to help landlords continue to basically profit more from their properties by getting less property damage long term, which actually puts more money in their pockets.
Then, tenants, we’re trying to reward them for taking care of these landlords’ properties and by doing so, you’re going to build up a savings and an investment for yourself for your future as well. So that’s kind of why the rewards and the incentive as put in play for that.
[0:16:12.3] GL: Now, that’s great, Thomas, and like what I love to say about RentFund and your mentality is that is seems like you’re always thinking about what’s next, how do we rethink what we already know about this industry, right? You’re not staying stagnant. So looking ahead then, how do you envision the future of rental payments or even the rental industry in general and kind of if you want to go into what role do you see RentFund playing in shaping that future?
[0:16:33.8] TD: I think we’re going to see a future where there is going to be a lot more people renting. I think there is a lot more people even people that could own properties, they enjoy renting because of the freedom associated with renting and anybody that has owned a home, they understand that it’s very expensive to be an owner and it’s very time-consuming. You got to cut the grass, you got to maintain the property.
You got to do all this stuff, you got to replace the shingles every 10 years, you got to do the windows, like there is a lot of – you got to pay the taxes. There is a lot of stuff associated, you can’t just get up and go on a vacation or if you have a – let’s say you’re in Edmonton where I’m at and you have a job opportunity in Vancouver and the market is not good right now in Edmonton to sell my home and I can’t accept that job because I can’t sell my home.
Well now, I have two options. I can either rent my home or sell my home at a loss, right? And that’s a hard place to be for a lot of people and there’s a lot of people that get stuck in that position that I just described. So I think the future of what we are offering is actually allowing people to benefit financially from their biggest monthly expense, which is rent but still have the freedom.
We have this slogan that we say, it’s like you have the benefits of owning with the freedom of renting, right? So you have the benefits of owning, right? You are able to grow an investment and benefit from that payment but you have the freedom to move wherever you want and that investment will transfer to you into any property that you move in.
That’s the unique thing about RentFund is a lot of our competitors, they do like equity share or they do something where it’s kind of locked into the property so they have to stay in that property like rent to own, you have to stay in that property whereas RentFund, you’re not confined to that location and freedom is a big thing for us because we understand that in the future, we believe people will be renting more not because they can’t own because they just want more freedom and I think that’s kind of where we’re trending.
[0:18:21.7] GL: No, that’s an interesting point, Thomas, like kind of what we’re seeing now, right? A third of total households in Canada now are renters. It’s like five million homes and it’s growing twice as fast as the rate of home ownership. So you know, if we can look ahead and try continuing, it makes complete sense what you’re suggesting as well. I know Matt has a few other questions for you, I just want to jump in quickly.
[0:18:42.0] TD: Yeah.
[0:18:42.5] MH: I do love the fact that you – this is not a rent-to-own program. I know a lot of people are looking into those right now as options because as you mentioned, you know, they can’t afford now but they want to own but this is you’re not looking for people to own in the future.
I mean, it’d be amazing if they can but how can you empower renters now in the short term without the maybe fake promise or unrealistic goal of owning a house that you’re renting in the future because so much change, as like you said, like job opportunities and people move. So maintaining that flexibility but also still empowering them a little bit more.
[0:19:23.4] TD: Yeah, absolutely.
[0:19:24.9] MH: Earlier you mentioned you’re based in Edmonton right now. I know you’re a newer company, you know, without giving away any of your secrets or anything like that but you know, what are some of your future plans to expand your services in other regions?
[0:19:36.2] TD: I think very, very soon we’re going to be available all across Canada. Right now, we’re in Alberta and as a startup company, it’s very important not to bite off more than you can chew. I had a mentor tell me once, he said, “A lot of founders don’t starve themselves because they don’t have enough to eat, they kill themselves because they overeat.” That’s what he said and that stuck with me.
So I was like I’m going to make sure that when I launch this company, I’m going to stick to a specific location and then slowly expand from there. Kind of like when you drop a rock into water, it has that first initial splash and then you have the ripple. That’s kind of the way that I wanted to kind of grow and develop and to get the market feedback really. So I feel like we have a lot of market feedback now.
People seem to really love what we’re doing and now we have people all over Canada really are asking us to like go into their city or like, “Is this available down here? Is this available in BC?” I’ve even had some people say they were going to move to Alberta just to get on our platform from BC like pretty cool. So I think we’re going to be expanding very soon. I can’t give a specific date yet because we have some other deadlines we have to hit before I can set a date.
But it will be very soon. I’m going to say probably over the next two months to three months I would say, we’ll be expanding all across Canada and it will be available everywhere.
[0:20:48.4] MH: So if you are a rental housing provider and you want to look into RentFund, where do you start and kind of what does that look like?
[0:20:55.0] TD: If you’re a landlord, I would say what you can do is you can go to our website, RentFund.ca, and there is a button there. You can click get started, you can go through the process to get started. It takes literally a few minutes and you can invite your tenants to the platform.
If your tenants accept and they want to pay the rent through RentFund, which I mean, any tenant that is good and they understand their finances and they want to get something back from their rent, they will sign up and use it and then that’s how that’s as simple as it is, then they can just start making their payments through there and it’s that simple. It doesn’t take long to set up at all, literally, a few minutes.
[0:21:28.7] MH: That’s what we love to hear, listen a few minutes and nice and easy.
[0:21:31.8] TD: Yeah, exactly.
[0:21:33.0] MH: Well, I appreciate your time today, Thomas. This was really insightful and we love having companies on like yourself talk about how they're, you know, looking at the rental housing industry in Canada and what they can do to improve the experience not only for tenants but for landlords as well. You said you got some expansion plans, where is a good place to follow RentFund and stay in the loop of future plans?
[0:21:58.7] TD: I would say you go to our website, RentFund.ca, and then we have a form on or we have an area there where you can put your email in and we can keep you updated on things that are happening, where we’re expanding, product updates, all that stuff. So you can go there and just subscribe and then that will keep you updated with what we’re doing with RentFund and the progress that we’re having with the product and yeah. So, that’s where people could stay updated.
[0:22:22.2] MH: Awesome. We’ll share the link as well when we put this out in a few days. Again, thanks again for joining. You know, love to see where the company goes in the future and maybe have you back on again someday.
[0:22:33.3] TD: Yeah, that sounds awesome. Yeah, when we got a couple hundred thousand users maybe or more, we could jump back on here and what I’m looking forward to is the impact really, is what I am looking forward to is when I see this mom or this family that never thought they would ever be able to own a home, they were able to make the rent payments using RentFund, save up a big enough down payment and now, they’re able to buy their dream home using the money that they were able to save from the platform.
That’s going to be a really amazing thing once that starts happening. We’re too early for that to happen yet but it’s going to happen and I am really excited for that. That’s something I look forward to for sure.
[0:23:07.4] MH: Awesome, that’s a great way to close it out. Again, thank you, Thomas. Thank you, Giacomo.
[0:23:13.1] GL: Yeah, thanks a lot, Thomas. It was nice talking to you.
[0:23:15.8] TD: Yeah, thank you both very much. I appreciate your time.
[0:23:17.7] MH: All right, have a great day, everybody.
[END OF INTERVIEW]
[0:23:20.5] ANNOUNCER: You’ve reached the end of another episode of Sync or Swim. Make sure to visit us at rentsync.com/podcast to access show notes, key takeaways, and where you can sign up to our newsletter to receive free bonus content. If you found value in the show, please also remember to rate, review and subscribe. Don’t forget to join us next week for another episode. Thanks for listening.
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