If you’ve ever rented either a house or an apartment, the chances are you will have used the services of a letting agent. Working on behalf of a landlord, agents tend to take care of a process that runs from advertising the property and arranging viewings through to pulling together the necessary contracts and ensuring that the rent is paid. Further down the line, they may provide the paperwork that renews the tenancy. In theory at least, they make life easier for landlords (by taking charge of all the administration) and for renters.
But even the best letting agents are seldom loved by tenants. That may be because some – along with the landlords they represent – are slow to action essential repairs when they are required while also charging steep fees for simple processes, such as the renewal of leases. Even in the best cases, the nature of the agent’s job means that renters are unlikely to think of them as anything more than a “necessary evil.” Or to put it another way, they are seldom loved and inspire little loyalty.
Spreading The Love
So is it possible to create a letting agency that is loved by those who – for whatever reason – choose to rent rather than buy a property? Is this a segment of the real estate industry where it is possible to create a brand?
Tom Allason, an entrepreneur who has previously built and sold courier and delivery businesses to Britain’s Royal Mail and to eBay, believes there is a real opportunity to do just that.
A Well-Trodden Sector
Now, “proptech” is a well-trodden corner of the digital landscape and there are software-based solutions designed to make it easier and cheaper for would-be tenants to locate, view and rent properties, either in their own countries or abroad.
Allason’s company – which has just secured a £7 million investment to scale up its activities – aims to offer a service that will secure the long-term loyalty of those who use it to rent their homes. “We want to establish a brand,” he says.
But is he really offering anything different?
As Allason recalls, Residently was born out of his own frustration. With building work due to start on a property he owned, he began the process of finding somewhere to live on a temporary basis. “I was looking forward to living in a different place in a different part of town,” he says. “But the entire process sucked.”
As he sees it, finding a place to live involves shelling out large sums of money in the shape of deposits and fees without any real sense that you’re paying for a seamless and well-executed service. Often the process is extremely stressful, not least because you find yourself trying to juggle two independent timetables. Giving notice to quit on a current tenancy sets one clock ticking. Meanwhile, you are at the mercy of another set of timelines, based on the availability of suitable properties. “You have a bad experience just when you’re spending most,” he says.
One solution is to create a platform that reduces the time taken to complete on a rented agreement. Allason claims that Residently can reduce that particular metric from an industry average of 28 days to 10.
Owning The Customer
All well and good, but you could argue that on those terms, Residently offers a one-off utility rather than a brand that inspires repeat business.
So Allason’s aim is essentially to “own” the customer through the provision of ongoing services, such as furniture rental and cleaning. And this side of things is, again, intended to be as renter-friendly as possible. For instance, the company controls the digital locks on its properties. Thus, cleaners can be scheduled and let in at certain times.
And every time a customer – on the rental side – moves, the experience is switching homes will be as quick and straightforward as it was first time around. “We aim to provide a great experience that will encourage people to use us again and again,” says Allason.
There is a slight caveat. As things stand, Residently is focused on one fairly specific part of the rental market – namely “late millennials” working in well-rewarded professions such as finance or law. In other words, people who have done pretty well for themselves and who are typically spending £2,000 or more on rent each month. This has made things easier for Residently in terms of marketing to a clearly-defined demographic and signing up landlords to provide the relatively small amount of properties required to service that audience. Equally important, at least part of the target audience is comprised of people who move around a lot for career reasons – people who Allason believes will welcome the ability to streamline the relocation process.
Prior to raising £7 million in institutional capital, Residently was funded by Allason himself, with some angel finance. During this period, it set out to prove the concept by focusing on just 100 rental properties. Now there is an opportunity to scale up and taking into account the international potential of its target demographic, it is also operating in New York.
As founder of courier/delivery businesses, Ecourier and Shutl, Allason has experience of platform-based companies that have a physical component and he is bringing that track record to bear on Residently. Central to its offer is the goal of turning one-off renters into long term customers who buy services. This aspect of the model, Allason says, enables the company to offer better economics to renters and landlords.
Is that enough to build a brand on the back of a utility? As the company seeks to scale up – that probably depends on the willingness of renters to use the platform not just to locate properties, but also to the buy additional services that make the model economically viable. In that respect it may appeal to the well-heeled who are both happy and able to spend on anything that makes their lives simpler. A more open question is whether the offer can be expanded to serve a wider demographic.
Source: Forbes – Entrepreneurs
Author: Trevor Clawson, Contributor