Start-up Rhove has partnered with a complex in Ohio to offer renters 'rentership', an asset that grows with the value of their rented property. With homeownership seeming like a faraway dream for many young people, there’s room for brands to help them build their financial assets in other innovative ways. We explore the insights behind this and how brands can help young people “level up” financially.
Noting that the average young person in the US will spend more than $200,000 on rent, Rhove is aiming to reduce the wealth gap between renters and homeowners. The start-up has teamed up with a property in Columbus, Ohio. Using Rhove, renters are granted a $50 stake in a property and a further $50 for each year they live in it. Through the app, they can buy extra fractional stakes starting at $5. Renters then earn a 5% ROI paid out of the rent that the property-owner collects, and if the property sells, they earn a fraction of the proceeds. “What we’re creating is a situation where renters are given many of the financial benefits of ownership while maintaining the flexibility of renting,” says Rhove co-founder Calvin Cooper.
As a brand, Rhove wants to help close the wealth inequality gap. Many young house buyers in America today feel “cash poor but house rich”, becaues of this, many do not have money saved for emergencies; in fact, 29% report having less than $500 or $0 in for emergency repairs. “This isn’t just a San Francisco and New York problem. This is an American problem. When you look at the data, the rent-to-income ratio is very high. Most Americans are spending over a third of their income on rent,” says Cooper.
Buying a first home has always been a challenge, but 49% of Gen Yers aspire to become homeowners one day. With home ownership such a significant life goal for many Americans, they’re willing to make huge sacrifices to achieve it. However, with a recession looming, it’s likely that reaching this milestone is only going to get tougher. Other brands are stepping in to offer innovative ways to help homeowners and renters find a balance. For example, United Dwelling helps property-owners convert unused space into affordable studio apartments. But there’s opportunity for brands and institutions to innovate in this space to make it easier for more people to build their financial assets.
Isabel Evans is a junior behavioural analyst at Canvas8. Fascinated by how and why people do things, she has an MSc in cognitive and decision sciences from UCL. You can often find her drinking endless coffees, running around Regent’s Park, or delving into a book.
