“If it can get you dates, it should pay your rent.”
That was the thinking behind software provider Rentalutions’ recent decision to accept rental payments in Bitcoin, a digital currency that dating site OkCupid has embraced.
The startup claims that it’s the first real estate company to accept the electronic cash, and that it’s adopting the currency in order to cater to a growing number of people who are beginning to use the fledgling currency.
“With digital currencies being the wave of the future, we thought, ‘Why don’t we get ahead of this trend?’ ” said Rentalutions CEO Ryan Coon.
Based in Chicago, Ill., Rentalutions offers property management software to mom-and-pop landlords. Among other features, the software enables landlords to accept rent and applications electronically and syndicate listings.
Coon said he began toying with the idea of accepting Bitcoin after a programmer who used Rentalutions lobbed it as a concept during a discussion about the security of the company’s payment platform.
“The guy who told us about Bitcoin is a pretty nerdy guy who was running a software business that’s now owned by Groupon,” he said. “I think there’s a lot of people enthusiastic about Bitcoin in the tech community.”
Coon and his team tossed around the idea for months, but it took a federal ruling in early August that concluded that Bitcoin could clearly be used as money to push them off the fence.
The decision signaled to Rentalutions that “digital currencies will be around and they will play a part in the economy in the future.”
“In Germany it’s a fully accepted form of payment,” Coon said. “I think the U.S. is well on its way to that kind of thinking, too.”
Coon said the biggest challenge of weaving Bitcoin into Rentalutions’ business model was identifying a way to guard against the possibility that the value of Bitcoin would plummet before Rentalutions would have time to convert it into cash. None of Rentalutions’ landlord clients are willing to accept Bitcoin themselves.
The currency has shown itself to be unstable at times, fluctuating wildly in the spring of this year.
But Rentalutions hedges against the risk of Bitcoin depreciation by using the Bitcoin-exchange service Coinbase, a company that will assume exchange risk for Bitcoin users.
Screen shot of Rentalutions’ home page.
The business move has already garnered the interest of some renters, according to Coon.
“A dozen or so tenants have reached out to us, some who use platform and others who aren’t, but still want to be able to pay with Bitcoin,” he said.
He added that Rentalutions expects to accept its first Bitcoin rental payments in October.