@Ronda R. @Eric James @Jay Hinrichs @Warren A.
Just a follow-up.
Rhino is insurance. Pay the monthly charge, they cover losses. They do try to go after the Tenant to recover what they've spent, but they don't have direct access to tenant funds.
Obligo is a "billing authorization" which means the Tenant gives them access to a bank account and a credit card. When there are charges, Obligo pulls the funds from the Tenant's bank account or credit card. If the Tenant has a dispute, they fight with the Landlord, not Obligo. If the Tenant shuts down their accounts, Obligo still pays the Landlord and takes responsibility for going after the Tenant to recover the funds.
How does it work? Landlord determines the amount they want coverage for, typically the same as a traditional deposit. Obligo charges a monthly fee based on the dollar amount and Tenant's credit score. The Tenant charge is somewhere around $10 - $20 per month, so it's easy for the Tenant to absorb. If there are charges, Obligo pulls from the Tenant's account and makes the Landlord whole. The only time Obligo loses is when the Tenant shuts down their account, but they've told me that happens 1-2 times a year out of tens of thousands of accounts. Tenants just don't think about it.
When you hold a large deposit, many tenants automatically write it off. They try to use it as last month's rent or fail to clean because they assume the Landlord is going to keep the deposit anyway (far too many Landlords do). When the Tenant has a billing authorization, they abide by the lease because they know you can take more money from them. They can't demand you apply the deposit to last month's rent. They won't leave the house filthy because they know it will cost them money out of their account. It psychologically changes the game and puts pressure on them to behave.
How does Obligo make money? If the average monthly payment is $10 and they have 10,000 renters signed up, that's $100,000 a month or $1.2 million per year. They collect almost all of the claims from the Tenant's bank account. They could lose $500,000 per year and still earn $700,000 per year. I suspect their numbers are even better than that.
