A recent vlog entry by Mark Juleen of JC Hart Communities lays out his frustration with the Rent.com model. And he thinks he’s not the only one. (See comments by Bell Partners and others). The entry created quite the firestorm in the industry and I think that Mark is on to something.
The more comments you read, the more it becomes clear, at least to me, that no one is out there to help the renter. So while I agree with Mark that the Rent.com model is flawed, I would add that the flaw goes far beyond their billing method.
Let’s examine: What is the purpose of an ILS (Internet Listing Service)? Who is their end user?
The purpose of the ILS is to advertise a property so that the property can fill its vacancies. But advertising is slick: For example, in 2 out of 10 times I drink Martini’s would I get the response George Clooney gets in the following ad. The goal of their Martini ad is not to be super-informative and accurate but to get me to think I can be George Clooney just by drinking Martini’s.
The same is true for the advertised properties on the ILS. Let’s not forget the end user, the renter, remember him? Here is a what the renter’s experience is like on almost any ILS:
Limited Selection – mostly large apartment buildings and communities. Private owners and small property managers missing (50% market share)
Apartment Listings are more like ads on the ILS. They are meant to generate traffic. Actual availability? Actual rent cost? Fuggedaboudit!
What you do get is a rent “range,” a general description of the property’s amenties, some model pictures and an 1-800 gateway (ad tracker) that re-routes you to the listing manager.
As a result, renters are forced to painfuly spend hours going through several different websites, carefully navigating their way and scouring through misleading and inaccurate ads. In addition, in some markets, like in Massachusetts, the renter is likely to get “rewarded” with a broker who charges one month’s rent for pointing out the bathroom, awesome! For renters, the process of looking for an apartments is one notch higher than water-boarding (too extreme? you get my point) on the “Things I Wish I Could Put Off Forever” list. I think the entire process of looking for an apartment is broken. Both the renter and the lessor are unhappy.
How do we fix it?
Imagine a world where you have one comprehensive rental database (similar to MLS for sales), where the renter can get a clear, verified and real-time view of almost all the available rentals in their respective market, call the owner or the property manager directly and never pay a broker fee. A database where all property owners and managers list for free. Let’s imagine that this database is called RentalBeast.com (Shameless self promotion, I know. I couldn’t help it.)
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One Comment
Ishay, thanks for sharing the story. You have an interesting concept. It will be interesting to see how it evolves as well. Looking forward to seeing some change.
Mark