As rents soar and incomes grow less predictable, more renters — especially in Latino communities — are turning to installment rent services that promise flexibility but often come with hidden costs.
This is how “rent now, pay later” works
These companies or applications work as intermediaries between the tenant and the landlord.
Its logic is simple:
The platform pays the full rent to the owner on the agreed date.
The user then pays the platform, either in installments, at a later date, or with interest.
Rent can eat up an entire paycheck at the start of the month, so a growing number of renters are turning to a financial product that promises relief by letting them split the bill — for a price.
So-called “rent now, pay later” services have emerged over the past few years as housing costs climb and paychecks grow less predictable, particularly for lower-income and gig-economy workers. According to the Bureau of Labor Statistics, rents have jumped nearly 28% in the past five years.
Companies such as Flex, Livble and, more recently, Affirm, say breaking rent into multiple payments can help renters manage cash flow.
Approximately 55% of Latino renters in Los Angeles County are cost-burdened, spending over 30% of their income on housing. While specific, total, real-time numbers for the exact count of Latino renters in the city are not provided in the search results, Latinos constitute 48.6% of the population in LA County.
Many of them are seeking help because of the economic situation that has been affected by immigration raids, but experts say that the options provided by this program should be approached with caution.
But consumer advocates warn the products typically function like short-term loans, layering fees onto already strained budgets and, in some cases, carrying triple-digit effective interest rates — raising questions about whether they ease financial pressure or deepen it.
Kellen Johnson, 44, started using Flex to split up his rent payments about two years ago. Instead of paying the whole $1,850 of his rent on the first of the month, Johnson would pay $1,350 on that date, and $500 on the 15th. For the service, Flex collected a $14.99 monthly subscription fee, as well as 1% of the total rent, which for Johnson was $18.50, bringing his monthly charges for the app to more than $33.
Johnson said he was willing to pay the extra costs in part because he worked as an independently contracted delivery person for Amazon at the time, and his paychecks could vary.
“It was an expense that I was incurring, but I went ahead as it was more convenient,” said Johnson, who now works as a driver for senior citizens in Sacramento, California.
Roughly 109 million Americans, or about 42.5 million households, are renters in the United States. The Census Bureau estimated in 2024 that a large share of those households pay 30% or more of their monthly income on rent. The bureau considers such households to be “cost burdened,” meaning rent consumes so much of their income that they have less ability to plan for future expenses or build wealth.
Rent now, pay later services generally operate the same way: The company pays the landlord the full rent when due, and the renter repays the company in two or more installments over the course of the month. Because rent can be such a large expense, the companies argue that spreading payments out can give renters more cash on hand.
Many of these services come with fees. The fees can be structured differently but should be generally thought of as cost of credit, consumer advocates warn. In Johnson’s case, he was paying $33.49 for a two-week loan of $500, for an effective annual percentage rate of 172%, when expressed using standard consumer-lending calculations.
“Renters should be skeptical of any financing providers that have partnered with a landlord and be skeptical of anything that sells itself as no fees or no interest,” said Mike Pierce, executive director of Protect Borrowers. Pierce previously worked at the Consumer Financial Protection Bureau and co-authored a report that was released this week on the industry.
Launched in 2019, Flex is one of the largest companies focused on splitting rent payments. The company says its 1.5 million customers now send about $2 billion a month in rent through its system, and several of the country’s largest landlords accept Flex as a payment option.
