Is the Bilt Rewards Mastercard the Next Big Thing for Investors?

What if we told you that you could use a credit card to pay the mortgages on your investment properties? And that you could earn points while doing so, which you could then use for free travel, down payments, or even for improving your ROIs? This is what the Bilt Rewards Mastercard could soon allow you to do. (We promise this isn’t an ad.)

Bilt recently announced that the company raised an additional $200 million from investors, putting the company’s valuation at an impressive $3.1 billion. Bilt said in a recent statement that the fresh investment money ‘‘will fuel further expansion of the Bilt Rewards Alliance across multifamily, single-family, and student housing sectors nationwide.’’ More specifically, the company ‘‘plans to venture into mortgage payment rewards.’’

We don’t yet know the details of how the new rewards program will work, but what we do know is that Bilt has a successful precedent with its rent rewards program. Currently, the Bilt Rewards Mastercard is the only credit card that allows users to pay their rent with a credit card without a transaction fee and earn reward points in the process. 

We can only assume that the mortgage branch of the rewards program will work similarly to its rent rewards program. Actually, we’ll wager that if it has any of the features of the rental rewards program, it might just become the best credit card offering for a real estate investor. Here’s why this could be true based on the current offering.

What Does the Bilt Card Currently Offer?

Currently, Bilt’s biggest draw is that it allows you to earn points on a 1:1 basis on rent payments and charges no transaction fees. The points can be used for things like travel and dining. They also can go toward future rent payments. 

This is a game changer for any renter: You can reduce your monthly rent payments simply by using a credit card without any fees or hidden charges. Oh, and there’s no annual fee, either.

Bilt partners with a nationwide network of property management companies covering over 4 million households. If you live in a Bilt Rewards Alliance building, you automatically earn a minimum of 250 points per on-time rent payment through the free Bilt app. You also get extra points for signing and renewing leases and referring new tenants. The more you spend on the card, the more lease incentive points (up to 50%). 

The really great news, though, is that you don’t have to live in a Bilt Alliance building in order to access the rent rewards program. You’ll just need to sign up for the Bilt Rewards Mastercard and then link it to the app. Literally, anyone who rents in the U.S. can pay their rent with Bilt. If your landlord doesn’t accept credit card payments, Bilt will generate and send a check or ACH transfer on your behalf. 

You get a point per dollar spent and can earn up to 100,000 points per year. The Points Guy values Bilt Rewards at 2.05 cents per point, which means that you’ll get 2.05% back on your rent each month. This isn’t huge, but if your monthly rent is $2,000, for example, you could effectively end up paying $1,959 per month instead. Not bad.

Even more intriguingly, the Bilt Rewards program allows you to save up for a down payment on a house using your points if the house mortgage loan is then originated through Bilt. That’s the feature some users will consider riskier—after all, you are essentially using a start-up company as your mortgage lender. However, Bilt’s business trajectory so far looks promising, so contributing to a down payment with free points from paying rent may well be appealing.

What’s the Catch?

You’re probably wondering what the catch is, and there are a couple. 

First, you have to make five transactions per billing period in order to get any points. Just paying rent on the Bilt card won’t earn you any, so you must use it for other purchases. 

Fortunately, the Bilt Rewards program offers pretty good point earnings on things like travel (2 points per dollar spent) and dining (3 points per dollar). These earnings are doubled if you make your purchases on the first day of the month, which the program refers to as ‘‘Rent Day.’’ Sadly, rent points aren’t doubled.

The other thing you need to know about the Bilt card is that it is a World Elite Mastercard. As such, it has a fairly high credit score benchmark for approval. You’ll need a credit score in the 670-850 range to get approved, which makes the Bilt unsuitable for new renters or people with a low credit score. This means you’ll need to first improve your credit score before you apply if you’re not quite there. 

The good news, though, is that once you get the Bilt Mastercard, you could improve your credit score even further by having your on-time rent payments reported to all three major U.S. credit bureaus (this is optional). That’s pretty good for those yet to make their first mortgage application. 

What’s In It for Investors?

For real estate investors, the expansion to mortgage payments could spell a number of benefits for Bilt Rewards users. Generating free travel from your rental income looks like it will be the most obvious perk. If Bilt introduces a similar system to the rental rewards program, where you could have your mortgage payments reduced by using Bilt points, it could become a formidable tool for improving your ROIs. 

We don’t know what the Bilt mortgage points earning structure will look like yet; we’ll just have to wait and see. If you’re just beginning your investment journey, are renting right now, and have a good credit score, a Bilt card is something to consider. 

Get the Best Funding

Quickly find and compare investor-friendly lenders who specialize in your unique investing strategy. It’s fast, free, and easier than ever!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.