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Brick Underground's guide to security deposit alternatives: Jetty, Obligo, Rhino, and TheGuarantors

There are ways to avoid shelling out so much cash upfront when renting an apartment in NYC.

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Signing a lease for an apartment in New York City is a real budget buster. You need the rent itself, perhaps a brokers fee, and a security deposit—the last of which may vary in amount, but is typically one month’s rent.

While renters have been complaining about this hefty outlay of cash for decades, these days you have some more options. There are several companies that can take away some of the financial pain of renting in New York (and beyond) by offering alternatives to the standard security deposit, and even help renters avoid getting dinged for normal wear and tear (e.g., a nail hole or some scuff on the wall.) We’ve rounded up four services that can help you secure an apartment without parting with so much of your money.

An important note: these services help you reduce the amount you need to pony up to move in, but do not relieve you of the responsibility for any damages to your apartment, so you still need to take care of the place. 

TheGuarantors

Initially founded as an institutional guarantor service after CEO Julien Bonneville, a French native, encountered the difficulties of renting as a non-citizen, TheGuarantors has branched out to address additional hurdles in the rental process, including security deposits. (They also provide renter's insurance.)

For a one-time fee of 17 percent of the requested security deposit amount, TheGuarantors will underwrite your security deposit with what’s known as a surety bond, or a property and casualty insurance bond. As a result, move-in costs are reduced and tenants’ money is freed up for investing or furnishing their new place. TheGuarantors will work with your potential landlord to set up the agreement, and will also offer its service to existing tenants as well.

The Guarantors want to make the rental process as easy as possible for both renters and landlords (decreasing move-in costs makes a landlord’s building more attractive to renters), and promises a quick and easy mobile-first user experience for registration and payment. In the event of a claim by the landlord, they file it online through TheGuarantors' portal, and receive payment within three days. (Tenants then pay back TheGuarantors.) 

Jetty

Another company that offers several products to help ease the process of securing a rental apartment (they too provide guarantor services and rental insurance), Jetty (a Brick sponsor) eliminates the need for renters to pay a full security deposit when signing a lease. Jetty members pay a single, one-time, non-refundable fee of 17.5 percent of the overall security deposit instead of the full deposit upfront or monthly recurring fees. (Example: the requested security deposit is $2,000; with Jetty, you pay $350 and are clear to move in.) Jetty also uses the surety bond model, and has a network of buildings and landlords it works with.

If there is damage that needs to be repaired, the tenant does not directly settle with the landlord: Jetty pays the landlord for the damages up to the full security deposit amount, and the tenant is on the hook to pay back that amount to Jetty. Note: the tenant may be obligated to pay any cost of damage above that amount to the landlord. To apply, all you need is the amount of the deposit, the term of the lease, and your landlord's approval. 

Obligo

The newest security deposit alternative on the scene (they launched this summer), Obligo doesn’t employ an insurance model at all. Instead, for a monthly fee, Obligo enables tenants to grant landlords billing authorization to cover incidents should they happen—sort of how you give a hotel a credit card to cover incidentals.

To qualify, renters must provide a U.S. bank account and credit card (which can be from anywhere, i.e., within the U.S. or not). You don’t need to have the full amount of your rent available when you apply, but you do need one-third. In the event of avoidable damage on your end and valid claims on your landlord’s, Obligo pays your landlord directly, and you pay Obligo. If you can’t cover the full bill, you can set up an interest-free payment plan with Obligo. (You can dispute claims as well if you think they’re invalid.)

Obligo is another service that has a network of landlords—and is happy to work with yours if they want to participate. Landlords send prospective tenants a link to an enrollment page where they can choose to offer a traditional security deposit of cash, or use Obligo's service. (The company’s co-founder and president, Roey Dor, says that so far, about 75 percent of renters are going the Obligo route.) Sample rates are $9.90 a month for a $2,500 a month apartment, and $19.90 for one that’s $5,000 monthly. Billing authorizations are good for 60 days after a lease is up, but landlords can release it at any time after the lease has run out.

Rhino

Rhino (also a Brick sponsor) offers a security deposit alternative in the form of a monthly fee, arrived at after you provide some basic info: your monthly rent, address, and unit number, as well as information to confirm your identity— income, credit history, and college. Your landlord needs to be in the Rhino network in order to use the service (you search directly on the Rhino site for qualifying listings), but if your landlord isn’t currently a Rhino participant, the company can reach out to them to see if they’d like to be one. (You can also make the case.)

They claim you can get a rate in about 60 seconds, and you don’t have to sign anything to find out what that rate is. You pay your monthly fee (typically $19 a month for a $2,500 apartment) and Rhino insures the apartment; if there’s ever a claim for damages, Rhino reviews the case and only bills you if you’re found to be at fault. So, for that $2,500 a month apartment, your total cost would for a year lease is $228, not $2,500, the latter being the typical security deposit for an apartment of the same monthly rent. Sticking with Rhino for another lease term or at another apartment pays: the service offers discounts of up to 40 percent for return customers.