As those 27-year-olds start rolling out of bed in mom’s basement and begin setting out on their own, the rental market is where they’re heading first, and tech companies (and agents) are beginning to cater to them.
More agent Realtors are specializing in rentals in 2013 than they have in the last 15 years, according to the National Association of Realtors’ 2013 member survey. In the 2013 survey, 6 percent of the agent Realtors surveyed noted that their primary business specialty was property management, a higher percentage than any year since 2007. In 2012 it was 5 percent; in 2011 it was 4 percent.
It’s not only the young people who are coming out of their parents’ woodwork to rent, it’s the numerous prospective homebuyers who want to buy a home but can’t because of tight credit conditions and very low inventory, said Jed Kolko, Trulia’s chief economist .
Tech firms are looking to capitalize on the growing trend.
Google Ventures-backed Cozy Services Ltd. launched a property management platform last Thursday that allows property managers, for $9 per unit per month, to easily handle rental applicants and coordinate seamless online payments.
Cozy, based in San Francisco, focuses on serving managers with property portfolios with fewer than 30 properties, said Cozy CEO and co-founder Gino Zahnd. However, Zahnd said, the company is also looking at the possibility of providing rental software to investors, like Wall Street hedge funds, who must manage many properties, and a lot of renters.
Cozy CEO and co-founder Gino Zahnd talks about Cozy’s rental property management platform.
Another San Francisco-based rental software firm and listing site, Graylock Partners-backed Zumper Inc., recently launched a free iPhone app, Zumper Pro, that allows an agent or landlord to create a listing from a unit and a digital flier for Craigslist.
Zumper, currently active as a listing site in New York City, Chicago and San Francisco, has plans to expand nationwide in the coming months, said Taylor Glass-Moore, chief operating officer and co-founder at Zumper. However, Zumper Pro works, he said, in all markets as a Craigslist post-generating app.
Zumper COO and co-founder Taylor Glass-Moore introduces Zumper.
Philadelphia-based Kwelia collates pricing info from a variety of sources, helping property managers and landlords to see rental prices of comparable units in the specific neighborhoods where they’re trying to rent and price a property.
Pendo Rent, a Vancouver-based company currently in beta, has a Cozy-like system for rental agents and small-volume landlords that offers online rent payments, document storage, tenant profiles and other features.
Pendo Rent’s marketing manger, Lisa Kennelly, runs through some of the features of Pendo Rent’s platform.
Agents are sometimes hesitant to work with rentals because commissions are so much lower than they are for home sales and because consumers generally understand much less about about using an agent to rent a home.
Some agents, like Lauren Mitrick, an agent with Newman Realty in Chicago, have always done rentals. She estimates that 35 percent of her real estate sales business comes from referrals associated with her rental clients.
“Rentals are a nice gestation of a client database,” Mitrick said. Renters usually become buyers, and if not, someone they know, like a parent, may be in the market for an agent at some point. “Sales and the rental market go hand in hand,” she said.
Mitrick, who will talk about her experience with rentals at a panel titled “Is Renting the New Normal?” on the second day of Real Estate Connect San Francisco July 10 – 12, says she was in the car with one client, showing her places to rent, and the client’s parents came along. By the end of the showing, her rental client’s parents had become clients themselves.
Mitrick says she manages some properties for clients, but focuses on finding renters for other property management companies. In Chicago, she said, agents get full months’ rent as commission for bringing a renter to a rental building and split the commission with the other agent when bringing a renter to a condo unit.
Are you doing more rentals in 2013? What tools are you using?
Real Estate Connect San Francisco takes place July 10-12. See agenda here.