Editor’s note: In part three of a three-part series on "accidental landlords," Inman News looks at Web sites and software applications that can simplify the job of marketing and managing rental properties. Part 1 looked at the factors to consider before pulling a for-sale property off the market to rent, and whether to hire a property management company to handle the details; Part 2 discussed setting rents in "ghost markets" where condos and homes compete with professionally managed apartment complexes.
If apartment seekers once began their search by default in the Sunday newspaper, today the hunt is more likely to start online.
In many major U.S. markets, Craigslist is where they will go. The site revolutionized the online classified advertising game, luring a large and loyal following away from newspapers by charging only for job postings in certain cities where the site is firmly entrenched (San Francisco, Boston, Los Angeles, New York City, San Diego, Seattle and Washington, D.C.).
Craigslist doesn’t charge for ads in other categories, including apartment listings (an exception is brokered apartment listings in New York City, which are $10). As a result, Craigslist long ago gained the critical mass needed to attract listings and traffic and become the dominant classifieds source in some markets.
Dozens of other Web-based rental listings sites — too many to list here — attract renters and landlords alike by offering bells and whistles not found on the more bare-bones Craigslist. A growing number offer tools designed to not only streamline the process of uploading listings but manage their properties once they’re occupied.
One reason Craigslist has plenty of competition is that it hasn’t caught on in every market — especially some suburban and rural areas.
"Craigslist is probably the single best (Web-based listing) source for smaller property owners, but it depends on the market," said Chicago-based property management consultant and educator Lisa Trosien. "If they are in East Overshoe, Montana, I don’t know that Craigslist is going to be that effective."
Marketing experts — and even some Craigslist rivals — say the site is still a great marketing resource for property owners, especially as part of a multipronged strategy that also involves other Web sites and even print media.
Before posting a vacancy, some landlords use Craigslist and other rental listing sites to determine rent. While the ebb and flow of supply and demand in rental housing can make rental markets hard to gauge (see Part 2), listing sites allow property owners and managers to see what others are asking for similar properties.
"The advice we give is to conduct a search as if you were a renter yourself," said Douglas Pope, co-founder of the map-based rental listings site HotPads. Pope said that with 73,000 properties, "you’ll be able to find comparable properties, with pictures, in any major metro area," on HotPads.
HotPads and other rental listing sites allow users to apply filters that help them find properties similar to the ones they’re trying to market. There’s so much variation between rentals — the age of the property, its fixtures and appliances, and amenities ranging from pools to parking — that good comps are more meaningful than statistics like average rent for the area, Pope said.
"HotPads is similar to Craigslist as far as the business model — it’s free to list and free to search — but we’re completely map-based, making the process more efficient," Pope said. "You can zoom into neighborhoods, see properties, and get articles and demographic information about neighborhoods, schools and public transportation."
At ApartmentRatings.com, property owners can see what renters are paying, as opposed to what other landlords are asking, said founder Jeremy Bencken.
"If you know a community down the street that’s the best comp, you can see what renters actually pay for a given floor plan, and get a good sense of what your competition is," Bencken said.
In markets where rents are falling, that could help property managers lure bargain-hunters who are looking to better their existing lease. ApartmentRatings.com — a division of Internet Brands Inc. — also reports market trends by city, such as the average rent for a one-bedroom unit.
Accidental landlords looking for tenants for a single-family home or condominium are advised to use similar properties for comps. A condo or homeowner could end up setting the rent too low if they use apartments for comps, because renters may prefer a condo or detached home if it’s roomier, quieter and has extras like a yard.
With 50,000 addresses representing more than 3.5 million units, Apartments.com claims that its collection of 35,000 single-unit, for-rent-by-owner properties is second only to Craigslist.
Apartments.com’s sister site, RentalHomesPlus.com, boasts more than 7,000 rental-home listings, said Kevin Doyle, Apartments.com senior vice president and general manager.
Both sites share the same parent company, Classified Ventures LLC, a joint venture owned by some of the biggest names in newspaper publishing: Belo Corp., Gannett Co. Inc., The McClatchy Co., Tribune Co. and The Washington Post Co.
Strength in numbers
Doyle said the ability to push listings to Web sites operated by those newspapers is "a huge competitive advantage. Not only do we derive a large amount of traffic through our very good organic search-engine optimization from Google and Yahoo!, but if you’re looking for an apartment on the Chicago Tribune Web site or the L.A. Times or Washington Post, our exclusive rental listings are available on the rental channels of those newspaper sites."
Sites like Apartments.com seek to further differentiate themselves from Craigslist by emphasizing the freshness of their listings, which in many cases can be bulk uploaded, and the ability to deliver more information.
On Apartments.com, Doyle said, "You’re getting a lot more information than you might see in a Craigslist ad, such as unlimited photography and floor plans. And in many cases we are taking data feeds from our advertisers, so our rents are always up to date."
Apartments.com has just launched a landlord resource area on its Web site, which includes a question-and-answer forum and articles on topics like tenant screening, contracts and leases, and evictions.
At ApartmentRatings.com, Bencken has, in some ways, turned the process of marketing a property on its head. ApartmentRatings.com is one corner of a triangle of related sites targeted to renters and property owners.
ApartmentRatings.com attracts potential renters who are interested in learning about the experiences of other renters, boasting more than half a million ratings and reviews.
The site, which claims about 1.5 million unique visitors a month, is ad supported — but doesn’t take ads from property managers. ApartmentRatings.com instead has a partnership with ThatRentalSite.com, a directory of rental listings where landlords can upload ads for free.
Bencken describes ThatRentalSite.com as "a Trulia for condos, rental homes and apartments" aggregating feeds from sources like Oodle, Postlets and Rent.com under one umbrella and presenting the results on a map. Ads submitted to ThatRentalSite.com are also rotated on ApartmentRatings.com.
The third corner of the triangle, TenantMarket.com, is where property managers are asked to fork over some money — to see profiles of renters looking for apartments in their area. The profiles may be generated when renters fill out a form to contact the manager of a rental unit on ThatRentalSite.com and agree to "match and share my housing search with other landlords."
Prospective renters can also post more detailed requests on TenantMarket.com, much the same way job seekers upload resumes to Monster.com, Bencken said.
"You can read these profiles, and tell whether people come across as professional and responsible, in a way that you wouldn’t be able to do if you were posting an ad on Craigslist," Bencken said.
Landlords complain that Craigslist postings don’t always produce "the kind of interest they were hoping for," Bencken said. He cited as an example "a guy from Craigslist who wanted to trade cooking for rent, and promised to pay when his cookbook got published."
"The feedback we’ve gotten from landlords is that TenantMarket has delivered the people they want to get responses from," Bencken said.
Although property managers can see how many renters looking for listings in their areas have submitted their profiles, they have to buy a subscription to TenantMarket to get them. Subscriptions range from $29.95 to $74.95 depending on whether they are good for 10 days, 20 days or until a listing is rented.
Although Bencken said TenantMarket really proves its worth in a soft market, it’s also been popular in tight markets like New York City, where landlords have no trouble collecting applications.
"A lot of times in New York, you will have a two- or three-family brownstone, and the owner will live on one floor and rent out the others," Bencken said. In that situation, he said, "They are very concerned about choosing their neighbor, and really like TenantMarket for the insight it gives them."
Online management tools
Another company that’s aiming to lure tenants to one site and landlords on another is Investment Instruments Corp. of Belmont, Mass.
The site aimed at tenants, Rentometer, allows users to type in their address and current rent, returning a speedometer-like graphic that shows how their rent compares to other comparable listings, which are displayed on a map.
While landlords can push their listings to Rentometer, Investment Instruments is hoping to sign them up as users of iiProperty, a Web-based property management tool aimed at owners of one to 50 or more units.
A free version of iiProperty allows users to create and track online ads, manage tenant records, invoices and late notices, and create for-sale and for-rent ads with unique URLs.
More advanced features including a monthly rent roll, tracking of income and expenses, monthly cash flow reports, tax reports and the ability to export financial data to Excel are available to subscribers for $12.99 to $64.99 per month.
"We started with a very basic management system fueled by online advertising, but our main goal is to offer free tools for owners and renters, and then hire a suite of more advanced tools for owners and property management professionals," said Allison Atsiknoudas, Investment Instruments co-founder and chief executive officer.
"Right now there are a lot of great point services that concentrate on one thing or another, such as advertising or tenant screening, but we’re looking to integrate those services into one application that’s very easy to use and is very competitive from a cost perspective," Atsiknoudas said.
There are many software applications tailor-made for property managers, although many are aimed at large companies.
Small property owners looking for software to manage a few rentals might look for an application that’s compatible with Quick Books, said Robert Massey of Rentals.com, who conducts educational seminars for property managers.
For professional property management companies, Massey recommends PROMAS Property Management Accounting Software. Other names in property management applications include Intuit Real Estate Solutions, Property Automation, PropertyView Solutions Inc., RealINSIGHT Software and Sage Software.
While there are more online tools and software for marketing and managing rental properties than ever, costs can add up.
"When you’re talking about marketing rental properties, you want to keep an eye on your expenses, and how much it’s costing you to market these properties, because there are not high margins" in rentals, said HotPads’ Pope.
When managing individual homes and condos, even property management companies have difficulties achieving the same efficiencies they realize when marketing units in large apartment complexes, said Caroline Latham, owner of the apartment market research firm RealFacts.
"When you’re talking about one or two units you’ve bought in a condo development, there are a lot of expenses and difficulty in screening tenants, collecting rents and marketing," Latham said. "It tends to be an inefficient market.
"The property management companies have to charge a fairly stiff price for individual units because they don’t have those economies of scale either. They get two units in one building and four in another, and yes, they have a management office and tenants can go there, but it’s not an efficient market."
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