Rhove, a startup from Columbus, Ohio, is aiming to shake up the rental game by giving tenants the opportunity to become stakeholders in their communities.
The company's mission is to provide renters with what it calls "Rentership," a term to describe a new category of housing that allows renters to rent while simultaneously earning a return from the communities where they live.
Cofounder Calvin Cooper told Business Insider that the app allows residents to purchase "RNTs," each one representing a stake in the property. Each stakeholder receives a 5% return, paid out monthly. The value of the stake is tied to the sale value of the property, a sum renters are able to collect when the property is sold or refinanced.
The initial app launched in 2019 as a pilot. Then, in July 2020, the company sealed a partnership with Gravity, a Columbus apartment complex developed by Brett Kaufman, a Rhove cofounder as well as the founder and CEO of Kaufman Development.
Every resident of Gravity gets a $50 RNT stake
"Every renter living in Gravity, and any property that offers rentership, is a stakeholder by default," Cooper said. "So when you move in, you download the Rhove app and claim your stake," he said.
In addition to the $50 RNT stake, renters have the option to buy, in single dollar increments, up to $500 worth of RNT per month using the Rhove app.
Renters can sell their stakeholdings through the Rhove app at any time. If renters decide to move out, they can still hold onto their stakes — they just can't buy any more.
As Cooper put it, Rhove's technology and automation makes it easy for property owners to turn their renters into stakeholders. The legal structure, he explained in a followup email to Business Insider, is that "stakeholders receive a contract right to financial value in the form of cash distributions from rent rebate payments equal to 5% of the RNT held (RNT Returns) and the value of their stake is set by the most recent appraisal. This is what ties the Rentership Pool to the sale value of the property."
"The minimum value of each RNT is set to $1," Cooper continued. "This means that, even if the property depreciates, renters can redeem their stake for what they put into it."
A relationship with renters
Since the launch, about 25% of Gravity's residents have registered with the app.
In October, Rhove hosted its first stakeholder meeting with Gravity, an event it plans to host annually. During these meetings, Cooper explained, stakeholders are able to connect with the property owner, learn about their vision for the community, and ask questions about rentership and how it works.
"People feel more connected to where they live because they've got this stake in it, and that gives people the desire to be more engaged, the desire to come to a meeting," Kaufman said.
According to Cooper, the app is already prepping to launch in a development in Ohio. They plan on expanding to several other markets through 2021.