Set Your Rent, a new Grand Forks start-up, allows people to rent for-sale homes with the help of an investor who buys the home and rents it to them.
Co-founder Adam Zach will present at 1 Million Cups Fargo on Wednesday, June 12.
After entering the world of real estate with a “house hack,” in which he bought a home where his roommates rented and helped out with the mortgage, Zach and an investing partner first formed a different company, Zen, in 2017.
“The sole goal was just to buy real estate investment properties,” Zach said.
In the midst of this endeavor, Zach and his investing partner looked for ways to reduce the lag between buying a property and filling it—a period which can feel economically fraught to an investor.
“We’d buy a property,” he said, “and depending on the season we might hold it for a couple months before it was rented.”
To compensate for the delay, they started showing some properties to potential renters before closing on them; in this way they could get a jump start on finding interested renters.
This technique led to the concept of Set Your Rent, which matches people looking for single-family homes with investors, who buy the property for the buyer to rent.
“We developed a website to play matchmaker,” Zach said.
The concept potentially opens up a greater pool of possible rental property, since if you want to live in a house that’s up for sale but only want to rent, an investor could buy the house and make it available for them to rent.
The dynamic benefits both the people who rent and the investors who buy, offering a valuable opportunity to those who are looking to get a taste of investing in real estate.
“I kind of relate it to when a parent buys a home for their son or daughter in college,” Zach said. The parent can use the house as long as their kids are in school, and once they’re out they can keep renting it to new students or sell it, potentially making a little bit of money from the sale. In fact, one of the first demographics expected to be interested in Set Your Rent was college students.
Another class of buyers Set Your Rent might interest, per Zach, is good people with positive income, good rent history, but poor credit, which can prevent them being granted the necessary loan to purchase a home.
“They’re stuck in this loop where they can’t build any equity,” Zach said.
With Set Your Rent, buyers have the options to rent to buy, just rent, rent with the option to buy, or pay on a Contract for Deed basis.
In order to make sure early users have a positive experience with the concept, Zach and his investing partner have been buying the first few properties before bringing in other investors interested in the idea. So far they’ve have purchased four properties using the Set Your Rent model. They also won a Grand Forks Shark Tank competition and an Innovate ND grant.
1 Million Cups Fargo takes place each Wednesday from 9:15 to 10:15 a.m. For more information on Set Your Rent, visit setyourrent.com.