Like Afterpay for your apartment: Would you rent now, pay later?
CBC
It's a familiar sight for online shoppers: An item — say, a men's suit jacket — is listed for $150. But beneath the sale price is a second offer: four payments of $37.50 with Affirm, Afterpay or Klarna.
In recent years, such buy now, pay later services have become increasingly common in the U.S. and Canada. Companies like Air Canada and CIBC have even hopped on the bandwagon, offering products that allow customers to spread the cost of flights and credit card purchases over multiple payments.
But can the same model apply to rent? That's what a small number of financial technology companies are banking on.
For a fee, providers like Calgary-based Zenbase and the U.S.-based Till, Jetty and Flex allow renters to split their monthly payments into two instalments.
The idea, said Zenbase founder and CEO Koray Oztekin, is to address the imbalance between when people get paid (often twice a month) and when their rent comes due (usually the first of the month).
"Our mission is to give people full control around how they manage their household expenses," said Oztekin, whose company launched last year and charges between $9.90 and $19.90 a month depending on the amount of rent a tenant pays.
Amid the high cost of rent (and just about everything else), Oztekin believes there's a growing market for this type of service.
"We're not developers, we cannot fix the housing supply issue," he said. "But at the very least, we could offer an option that people can use if it makes sense for them."
While rent now, pay later products are still fairly new, they generally come in a couple of flavours, said Tal Schwartz, a senior tech product manager who writes the Canadian Fintech newsletter.
Earlier versions of this product, he said, were typically geared toward landlords and embedded into property management software.
"So when a landlord is requesting payment from a renter, this would be one of the checkout options," said Schwartz, who is also the former head of research for the Canadian Lenders' Association.
More recently, Schwartz said other products have been introduced that work directly with tenants.
One was offered by Chroma Technologies, another Calgary-based company.
Users paid Chroma half their rent on or before the first of the month. The company would then pay the entire month's rent directly to the landlord, and renters would pay the outstanding balance back to Chroma on their next payday, said CEO and co-founder Myles Shedden.
