Jetty is a company who provides security deposits, co-signing and renters insurance for consumers who are either shopping for an apartment or already living in one.
Normally, if you don’t have the credit scores or income to qualify for an apartment, you’d have to do the really awkward thing and ask your parents to co-sign for you and/or help you pay for your security deposit.
Basically, co-signing means they’re vouching for you and if you don’t pay your rent, the landlord or rental agency can go after your parents. For a fee, Jetty will save you from that embarrassment through co-signing for you and, if need be, helping pay your security deposit.
And, when you move into that apartment, they can provide you with the renter’s insurance you’d need to cover your personal possessions in the event of thievery or disaster.
The Jetty concept sounds great. You can avoid awkward conversations by hiring this company to take care of, aside from rent, all the financial obligations required to get a place.
With so many college graduates entering the working world with tens of thousands of dollars in student loan debt and an average monthly payment of around $350, the idea of saving up enough money for a security deposit, let alone have good enough credit for a decent apartment, can be daunting.
But is Jetty the right solution? What exactly do they offer when it comes to co-signing, security deposits and renter’s insurance? What kind of fees are involved for their services?
These are the questions we’re going to answer in this review.
Jetty Passport: Security Deposits and Co-signing
If you’ve got bad credit scores and minimal income, it can be tough to lease an apartment or home if the owner does a credit check.
Jetty’s website speaks directly to that situation, saying, “Finding your dream apartment feels pretty swell. Dealing with a security deposit and searching for a co-signer on your lease? Not so much. That’s where we come in.”
Okay, so the stage is set. Jetty knows you’re stuck because you found a place you like but don’t have the financial credibility to get a lease. Even though you’re the one in the difficult position, it doesn’t mean you can’t make clear financial decisions.
So, with that in mind, let’s take a look at Jetty Passport, the name they give to their security deposit and co-signing services.
Security Deposits With Jetty
According to Apartment List, the average rent for a one-bedroom apartment in Los Angeles was $1,350 in 2017. The average American, as many sites have pointed out in the past few years, has less than $1,000 in their savings.
So, if you’re moving into a rental for the first time, you don’t have a previous security deposit to roll over and you probably don’t have enough in savings to cover it.
Jetty comes along and offers to cover your security deposit for a 17.5% one-time fee that you won’t get back. So, if you’re required to put down a $1,350 deposit and you choose to go with Jetty, you’ll pay $236.25.
The real question is, “What happens after that? How does Jetty pay my security deposit?”
According to their website, they use what’s known as a surety bond. This financial product basically acts as an insurance policy for the landlord and a credit for you. If, for some reason, your landlord demands all your security deposit because of damages, you’re covered because the bond pays out to the landlord.
Jetty gets their cut, the landlord gets her money and, you? Well, according to Jetty’s rules for their surety bonds, you’re still liable for the damages you caused when you rented the place. That means that you’ll still be on the hook for any money they pay to the landlord. Here’s how they describe it:
“Keep in mind that this isn’t an excuse to wreak havoc on your place, -- you’re still responsible for any damages … and your fee won’t be returned, but we’ll take care of meeting your landlord’s security-deposit requirement so you can move in without any hassle.”
In order to sign up for their security deposit bond, you’ll need to provide them with the following information:
- Deposit amount
- Length of lease
- Pay stub/letter of employment and bank statements
Co-Signing With Jetty
The basic definition of co-signing is someone sharing the legal and financial responsibilities outlined in your lease. Basically, they are legally obligated to come up with rent if you flake out and don’t pay.
Jetty is willing to be your co-signer through the same bond offered for the security deposit. The payment structure on this one is different, though. According to a conversation we had with a Jetty chat representative, you’ll pay 5%-10% of a year’s worth of rent in order to get the bond.
The bond guarantees the landlord gets paid if you don’t come through on your rent. Just like the security deposit, though, you aren’t automatically off the hook. You will owe them the amount they paid out to your landlord.
In practical terms, a year’s worth of rent at $1,350 will cost you a co-signing fee of $1,215 if your fee percentage is 7.5%. Exactly which percentage you’ll get, Jetty said, is based on your income and credit scores.
Pro tip: You’ll have to provide the same information you would if you were using a Jetty bond for your security deposit.
Getting Renter’s Insurance With Jetty
The final service that Jetty offers is renter’s insurance, a basic policy that covers the cost of any claims made in the following categories:
- Contents: Your stuff
- Liability: Damage to other people’s property
- Loss of use: When you can’t live in your apartment or home
- Medical payments: Someone gets hurt in your residence
Jetty also offers $300 worth of complimentary bed-bug protection that you’ll get if a licensed professional confirms that you’ve got bed bugs.
These are the basic things the company offers in the renter’s insurance. You can adjust the levels of coverage for each of the four areas we talked about and you can also add on Power-Ups, which are extended coverages for things like electronics or pricey valuables that usually have a cap on how much you can be reimbursed.
Your monthly premium depends on how much coverage you select and where you’re living – you’ll enter the address you’re living at to start the process.
Our Final Thoughts About Jetty
Jetty offers renters and interesting mix of products that seem very attractive if you are in a jam and don’t have the money or credit history to get an apartment when you need it.
In the end, our research shows that figuring out if Jetty is right for you is a matter of understanding the cost of using the service.
So, let’s say you’re looking for a one-bedroom apartment in L.A. and you don’t have the savings, the credit or a co-signer to get your apartment.
We’re guessing that you’ll pay 10% (the highest rate) up-front for the co-signing, which would put your total initial payment for co-signing and security deposit at $1,856.25.
What’s interesting about that number is that it’s more expensive than what you’d pay for a one-month security deposit on an apartment with $1,350 rent.
In our opinion, that’s a lot of up-front money to get into an apartment. Now, there’s no arguing that Jetty is an innovative service that offers a way to get an apartment when you don’t have many options.
But, we believe the service puts renters with low credit scores in a bind. For example, it’s the poorest families who have the lowest credit scores. So, naturally, they’d be the ones who would probably pay 10% for co-signing.
There may be the occasional person with low credit scores and a really good income, but the stats say that is the exception to the rule.
So, what do you do if you’ve got low scores and low income and your potential landlord denies your application because they don’t like your financial standing? Jetty is an option.
However, you’ll need to count the cost. If you don’t have the money to pay for the co-signing service, then you’ll most likely have to put some or all of your up-front payment on your credit card. Let’s say you charge $1,5000 of that $1,856.25.
If it takes you one year to pay off that balance at an APR of 24.99% (common for those with bad credit), you’ll pay about $210 in interest. So, your final bill for using Jetty ends up being more than $2,000 when, under normal circumstances, you’d pay a $1,350 security deposit, a nominal application fee and call it a day.
Based on our research of the numbers, we think Jetty is a good option if you have low credit scores but high income and/or money saved up that can cover the up-front fees.
We also believe that Jetty is an excellent tool for paying an up-front fee in exchange for a security deposit, but only if you are a clean renter who tends not to lose any of his or her security deposit upon moving out. If that’s the case, then you’ll end up paying the 17.5% fee on top of whatever the landlord is asking you to pay for.
If you have low scores, no savings, low income and nobody who can co-sign for you, then you’re in a tough situation. If that’s the case, you may want to consider asking family or friends to help you out so you can avoid using a credit card to pay your Jetty bill.