RentSpree, an end-to-end rental management software provider, announced launching its new Agent Tools solution suite, according to a press release.
The suite includes Rental Client Manager (RCM), Agent Profiles and Listings, and is intended to provide real estate agents an all-in-one offering that supports holistic rental management, including advertising, nurturing leads and closing deals.
The RCM service enables agents to provide real estate guidance to clients by capturing contacts from RentSpree’s other products, offers direct contact creation and supports CSV import. The Agent Profiles tool gives these professionals a way to boost their brand, and feature their expertise to help capture leads throughout the rental lifecycle.
Lastly, the listing pages give agents the power to market their properties, integrated with RentSpree’s tenant screening product, and gives these listings visibility on the company’s several approved MLS partnerships.
While institutional funds and large multifamily property owners already being served by a number of property management services, an interesting recent trend has been the rise in rental management tools aimed at mom-and-pop landlords.
Although this demographic, usually described as owners with four or less houses managed, makes up the largest number of rental properties in the U.S., its fragmented nature has meant slow adoption of property technology.
RentSpree is one example of a proptech trying to service this segment, and it is doing so in a way you wouldn’t expect traditionally. While rentals tend to be low on the totem pole for real estate agents and brokers, due to a reduced commission, the property management startup has decided to partner with these organizations and act as a bridge between them, landlords and renters.
FinLedger recently spoke with RentSpree CEO Michael Lucarelli, who talked about the company’s focus on forging agent relationships, the challenges faced by individual landlords and the best ways to service renters.
Q: Can you just describe RentSpree and the services you offer?
A: RentSpree is designed to address a specific segment of the rental market, that most people don’t really address that well up to date, which is kind of your long tail mom-and-pop, individual investor and small property manager side of things. It’s a little bit different than multifamily and the institutional side in that there’s a lot more different individuals, and a much broader group of individuals that have a smaller number of units they might own or manage. This is actually 50% of the total rental market. It’s interesting to see that no one has been successful in really addressing the segment of the market. What we’re about is aligning that segment of these smaller mom-and-pops and investors, and agents and brokers with tools that can make them a lot more comparable to the tools that may be available to large institutional managers. We help with everything from screening to tenant management, with a special emphasis on agents as well, helping them to handle rentals quickly and efficiently as they work with their rentals. We have rent payment, rent collection, and we offer a CRM tool. All things of that nature that like I said, help put them a lot more on par with some of the tools being offered to the multifamily side today.
Q: Why did you make that choice to focus on mom-and-pop units?
A: A lot of it really did come from my own personal pain points, so kind of like your typical entrepreneurial thing. I was a renter when I moved to LA originally back in 2014, and I was faced with a lot of manual paper processes. I remember when I wanted to find an apartment to rent, I was not only handed a piece of paper to fill out by hand, but also I was told to fax this piece of paper back to someone. I’m not that young anymore, but I’ve never seen a fax machine nor used one for sure. It was just kind of eye opening to me at that time. When I saw that, I did some research and that’s where I saw that this segment of the market was really under addressed by a lot of companies. The companies on the multifamily side are billion dollar market cap companies, think of MRI, AppFolio, RealPage, etc., but there’s just not the scale of players that are helping these mom-and-pops. That’s really where RentSpree kind of came into play. We’re really good at helping agents and smaller landlords to interact with renters, in a way that puts them on a technologically equal standing.
Q: You pointed to a focus on agents. What are their biggest demands and how do you meet those needs from agents?
A: Probably our most prominent users at this time are real estate agents. This again comes from my pain points. Not only was I a renter, but I ended up getting my real estate license, and was hanging my license at a local REMAX nearby. That’s where it hit me. A lot of the agents that were very successful in the office, the top producing agents, actually worked a lot with rentals, but it wasn’t something that was really talked about much and certainly wasn’t addressed by the broker or the owner of the brokerage. There weren’t a lot of tools out there and no processes for the agents to handle rentals. When I saw those two factors, agents working with rentals, but no tools available for them, it just creates a lot of inefficiency.
This is where rentals get a lot of kind of like that redheaded stepchild stigma from agents, where a lot of agents might not be as likely to work with them. The reason why they don’t work with rentals for some agents is because it just takes so much time to do it, and it’s so inefficient because there’s no process. Now combine that with the fact you don’t make as much in commission from the rental. That’s a little bit of where RentSpree comes into play, and then we come full circle to the fact that often times the agents work rentals to make a little bit of income, but those top producing agents are actually building their network through working rentals. You’re really coming into contact with dozens of renters who are just future first time homebuyers, developing relationship with landlords and investors who may buy or sell properties in the future. For me, working with rentals is an invaluable tool for agents, where they can generate a little bit of income and actually generate leads. It’s actually the only lead generating activity you can do that earns you income as you go. It’s kind of something that a lot of agents have gotten right like I said, the top producing agents, but we make that process and technique accessible to a broader swath of agents across all 50 states in the U.S.
Q: What was your process for getting into all 50 states?
A: We partner with a lot of the larger real estate organizations in the U.S., and so we use that as kind of a springboard to make sure that we are having coverage across all the major geographies where rentals are prominent. We work with close to 35 multiple listing services (MLS), where we cover more than half a million agents. In total, we have over 200 different partners including MLS brokerages, listing sites, proptech platforms, realtor associations and more. We’re able to effectively partner with these organizations and that’s how we can really make sure that agents who need this tool have it, and that it’s accessible to them no matter where they are in the U.S.
Q: When you’re looking at partnerships, what do you need to see from that and what drives you to strike something with another company?
A: The thing that’s most important for us about working together with these larger real estate organizations that have been around for decades, is to make sure that we do view it as a true partnership. I think a lot of companies that come into the proptech space and attempt to service these types of organizations don’t necessarily set the stage for collaborative work. We are very hands on with all the partners, so we will integrate our platform into these MLS and basically do as much as we can to take the burden off of those organizations. We make the rollout really easy and straightforward. It can be done in less than two weeks, and then we provide full marketing support and education. We’re able to make sure that not only are we providing this tool to agents, these MLS and associations, but we’re able to properly support that with our team. We provide marketing assets, collateral graphics, copywriting and everything like that, which really makes for, like I said, a fruitful partnership with these types of organizations. That’s really been the key for us.
Q: You raised an $8 million dollar Series A led by 645 last July, and I know they lead your seed round as well. How did you get connected with them? How have you used that capital and are you planning to raise again?
A: We got connected with 645 through another investor that had made a referral to us. It’s just one of those things when you are networking, you don’t really know exactly who you’re talking to at the time. But not only that, but you don’t really know who that person could introduce you to in the future. It’s really just getting out of your comfort zone and making the most of those opportunities when you do get to meet people. I think it was investors that we talked to introduced us to another investor, and then they introduced us to 645. That probably happened over the span of three months where we had gone through those introductions. That’s where we ended up working with them.
With that $8 million Series A we ended up really expanding our platform quite a bit. We launched our rent payment platform and now I think after launching rent payment for just a couple months, we’ve already processed close to $1 million dollars in rent. We are planning to probably raise our Series B sometime a little bit later this year, to just continue expanding the team and building on the platform that we’ve established. With the next raise, we’re really going to focus on drilling down into the relationships that occur between users on RentSpree.
I think is probably one of the more unique things that we are thinking about and working on, in that we’re not catering to one user type, but understanding that of the three users on RentSpree: agents, landlords and renters. They all have interaction with each other at various points, and all three of those groups are on their own “real estate journey with different goals.” Our goal will be to really connect those individuals on RentSpree so that they can establish a meaningful relationship, and then gain access to the tools that they need at the time when they need it. Whether you are a renter that may be looking to rent another place and maybe buy in the future, a landlord that’s looking to find a long-term tenant and maybe maximize their investment, or an agent who’s looking to really do more transactions and improve their business. They’ll all be able to do it on RentSpree.
Q: What would you say is the biggest challenge when it comes to all this? Is it tenant screening, is it more dealing with payments, or something else?
A: I would say the biggest challenge for us is making sure that you can really draw those connections between the products that RentSpree offers. Beyond that is making it so that everyone is really on an equal playing field, and that they can interact in a way that does truly develop a meaningful relationship. As an example, we’ve just launched a tool (Agent Suite) that will enable an agent to provide further value to a renter over time. For example after signing a lease, you could send a welcome package to the renter, where they can get help with moving, setting up utilities or even just a thank you note or gift of some kind. Being able to take what is currently being done by top agents to develop these relationships, and then making it a lot more accessible and easy for everyone to do on RentSpree is something that we’re going to be working on a lot over the next 12 to 18 months.
Q: Besides that, is there any big goals that you want to tackle this year and moving forward?
A: I think for us, our biggest goal is just to make sure that we can address the needs that these different users have. This year, we will be focusing mostly on tools for agents, like this tool where they can develop relationships with renter clients. We launched listing pages so that they can market rentals now on RentSpree. Adding a marketing component into that, like facilitating the screening and application component into the marketing, is one of the key things for us. The suite also includes an agent profile. We just launched our first agent profile, where a renter can go in and see, ‘Who is this person that they may be doing business with? What do they look like? What’s their bio? What certifications do they have? What brokerage are they working for?’ Everything like that. We’ll be focused on agent tools for this year, and then going forward for next year we’ll be focusing a lot more on tools for landlords and agents. Building out a full property management suite for landlords that’s very, very robust compared to what it is now, and then providing the services that renters need over their lifespan in their rental journey.
Q: Can you go through that tenant screening process, the challenges and benefits of it, and how you go about that?
A: Before RentSpree came along, and there’s a couple other tools out there that help with this, but in order to really run a proper screening on someone and gain access to everything from an online rental application form to getting a credit check. If a background check is on the table, then getting access to that, that was really hard for landlords and even agents who are doing rentals, just because they would have to go through an on-site inspection, get an underwriting process that can take weeks and weeks, and they may not even qualify for that. If you’re a mom-and-pop landlord, you maybe don’t have an office and some of the credentialing in place that you might need. We make it really easy, because they can sign up and start screening their first tenant for their property literally within two minutes. That’s a huge hurdle that RentSpree brings down, and then there’s a compliance policy component as well. That reduces risk. Now with RentSpree, these landlords and agents never have to handle the social security number for the prospective tenants. Mind you, these aren’t even the tenants at this point, so why would you want to have and harbor the social security number for every person who’s applied? You may need it for the tenants that actually rent out your place, but you shouldn’t have it for the 10 people that apply to your property, right? We totally eliminate that.
On top of that we make it really easy to comply with the Fair Credit Reporting Act. By providing adverse action letter templates on RentSpree, you can easily provide a proper denial to an applicant, which you must do if you’re going to deny them on the basis of a credit or consumer report. We make things like that really easy, which to us is all kind of like part of the screening process and much more than just sending a credit check, for example.
Q: Is there anything I maybe didn’t ask that you think I should know about RentSpree or just the journey in general?
A: No, but I think it’s just important for the industry. When we started RentSpree in 2016, talking about rentals, especially on like agent and brokerage circles, it was just like totally under the table. It’s been really cool to see how we’ve been working at it for the past couple years and now like rentals have become so prominent, which I think is due to the industry’s changing economic conditions. Those rental activities are really starting to come to light. It’s been really exciting to see how the industry itself can take a more holistic view on real estate, to say that homeownership isn’t the end-all, be-all anymore. We have to recognize that while homeownership is great, and it’s a great goal for a lot of people, it may not be attainable. For some consumers it may not be what they want, they may have different goals in their life. It’s really nice to see how we can help the real estate industry itself to adapt to the changes of consumer behavior and economics, so that they can interact with them and handle rentals with the same degree of tools and the same degree of care and consideration that it has been handling selling and buying for a while.
Q: What are your thoughts on how the industry has changed the way they look at agents and brokerages. People said they were going to get rid of them, but obviously that’s not happening. What are your thoughts there and how you’ve seen things change?
A: I feel like I’ve been hearing a lot of those comments and quips for the past couple years, but I really think that over time, a lot of that has died down. It seems like it may even coincide with COVID a little bit, where if there was going to be a change like that to happen, I feel like it would have happened during COVID when you couldn’t meet people in person. But a lot of the real estate transactions still needed to happen and the agents were still a prominent position in that, despite the fact that you couldn’t meet people in person anymore. There still was that relationship building and human interaction that was occurring naturally, even though you couldn’t see people in person anymore. I don’t think it’s something that’s gonna really change, and so we’re all about empowering this user group of agents to be able to service the industry, because we do recognize that they have an integral part to play in the entire ecosystem.
In other recent proptech news, Yardi and WeWork partnered to enhance the previously announced WeWork Workplace management software. RentRedi also raised a $12 million Series A and announced plans to scale its landlord rental and management software.