How Can Tenants Build Wealth By Renting?
It sounds to good to be true, “Build Wealth While Renting.” However, there are innovative companies trying to make this happen. Up&Up is an example of a company using a virtual wallet to help tenants save money and/or buy a home.
Up&Up purchases property for rent and sale. One of their goals is to allow current tenants to purchase their properties. However, this process is traditionally known as rent-to-own and has a bad reputation. The 2 biggest problems are tenants:
- Losing their down payments and
- Committing to a predetermined price.
As a result, Up&Up avoids these problems by using the Up&Up Wallet and selling property at current market prices.
When a tenant rents from Up&Up, they receive an Up&Up Wallet that gives them the option to purchase their rental property. During their rental, the wallet grows in value and can be accessed when the lease expires.
4 ways tenants save money and grow wealth in their wallets
- Pay contribution equal to 2X the rent instead of a Security Deposit: When a tenant rents a property from Up&Up, they do no pay a Security Deposit.
- Receive portion of the monthly rental profit in their wallet: Each month, the tenant has a small portion of the rental profit deposited in their account. The amount deposited in based on the monthly rent minus any maintenance expenses.
- Contribute additional money to their wallet: Up&Up allows tenants to deposit additional money in their wallets. According to their website, the average tenant contributes an extra $100/month.
- Benefit from the growth of the wallet as the market value of the property increases.
3 ways tenants use the money in their wallet
- Use value of the wallet as a down payment to purchase the property: 100% of value is available
- Transfer the value of the wallet to a new property and keep it growing. 100% of value is transferred, but an additional contribution of 2x rent is not required.
- Cash out the value of the wallet: 90% of value is available.
Steps for Tenants to Use Up&Up
- Find a property from Up&Up’s Listings
- Combined weighted credit score of 680+
- 3x rent in household income
- Willing to sign a 2-year lease
- Willing to put down 2x rent as an initial contribution to Up&Up Wallet
- Create Up&Up Wallet
- Sign Lease and Move-In
- End Lease…Up&Up Wallet Options
- Renew lease
- Purchase rental
- Transfer Up&Up Wallet to a new rental in network
- Cash out Up&UpWallet
While Up&Up only operates in Atlanta, Ga and St. Louis, MO at this time, they will expand and their model copied if they find success. As a result, don’t be surprised to see virtual wallets and other innovative wealth building seolutions targeting tenants in the future. Home ownership and wealth generation are big issues in the United States and are not going away.
Other Helpful Info
3 Differences Between Hard and Soft Credit Checks
3 Things to Know About Lease Buyout Clauses
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