LeaseLock is hoping to do away with the need for security deposits in order to help renters gain approval while ensuring property managers for losses due to unpaid rent or damage.
The startup says it’s the first security deposit insurance company to go nationwide in the U.S. Renters pay a small monthly fee as opposed to a large security deposit, while landlords and property managers pay nothing at all. LeaseLock then provides an insurance policy that covers them against financial losses due to non-payment of rent or damage to the unit.
LeaseLock insures the property manager against loss of rent in the event of renter default. It also replaces the need for a cosigner, guarantor or collection of extra security deposits.
It works like this: The renter applies for approval at LeaseLock’s site, and once they’re approved they will pay a fee ranging from $15 to $75 per month according to their risk profile.
The idea is to help renters who're unable or unwilling to fork out for a big security deposit, which could range from $500 to $2,000 for an apartment that costs $1,500 per month to rent. LeaseLock replaces that security deposit with its policy that provides assurance for landlords, while tenants get to free up their deposit money to spend on other things.
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