In these tough economic times, the rental market is heating up and so is Rental Relationship Management
A Brief History
When I first started doing Boston rentals, back in 2003, there were no database management systems available for brokers to manage their rental listings. Listings would come in through fax, sometimes email, and the listing sheets would be filed in a binder alphabetically by company. Sometimes there would be a different binders for different neighborhoods, but since many management companies had listings in multiple areas; they usually just went into one big general binder. If you were a rental agent, you had to know what companies managed which properties in order to know where to search for listings and what to show potential renters. Oftentimes, as management companies gave their listings out to multiple brokers, agents would have to call a company who did not send out daily updates, to see if a property was still available before showing it.
In-house listings were also treated in this manner. At Copley Real Estate, all the listings were written on little sheets of paper and were filed in these accordion style books, one for 1 beds and studios, and another for 2+ bedrooms.
Advertising was a very time consuming process. To place an ad on craigslist, not only did you have to know the basics of html, but you had to upload each picture every time, even if you were just reposting. While working in Allston, we did a lot of advertising on individual college websites, which had places for brokers to submit their listings. However, they charged on per listing basis. Besides being very expensive, the sites were very cumbersome to input listings into and even more awkward was the search feature. In the long run we got very few leads from them and these sites eventually died out. Another site, if you could afford it, was Boston.com. They charged a monthly rate (now I believe its $70/mo), for X amount of listings. And while listings never expired, each one had to be entered in separately by each agent who wanted to use it. They also offered premium “banner” ads. But with no tracking or analytic data, the ROI was very difficult to determine and many agencies abandoned such campaigns.
Unfortunately sites like Trulia and Zillow had yet to come reach their maturity especially when it came to rentals. The only universal advertising site was BostonApartments.com. Not only being extremely cheap (about $100/year) it was, and still is, the #1 organic search result when searching for the term “Boston apartments”.
If you had a listing you wanted to co-broke, you would send out a mass email, which would usually wind up in the junk-email folder, or put it into MLS. But since many rental agents did not have MLS, it was very rarely used.
That was the way it was for the next few years. In terms of apartment listing management software companies, a slew of national companies tried to create similar solutions, but without an understanding of Boston’s unique rental market, they all came up short in some way or another. Databases were usually an afterthought or extra feature offered by the hundreds of real estate web design companies. Though they did integrate MLS listings, rentals were not even a consideration to most. On top of being very expensive, they would require long term contracts of at least 1 year. Also, you could not change anything on the website without it costing you extra. When your contract was up, and you did not renew, because they also hosted it for you, you would lose the entire site. The company that I had the pleasure of dealing with was RLS2000. The broker at Copley Real Estate signed up for this site because he just franchised out to Weichert and was concentrating on sales. Referred to him from the parent company, of course, he needed a website where potential buyers could search MLS sales properties and then contact him directly. The only other good feature they offered was Google Adwords campaigns with reporting and campaign management features. Even though they were charging us monthly for not doing anything, very few companies knew enough about Google Adwords to set up campaigns for themselves.
The Evolution of Rental Relationship Management Technology
It has taken a long time, but in the past 2 years I have seen a few companies emerge in the real estate technology services industry that seem to understand Boston’s unique rental market and have developed customized solutions specifically designed for Boston Rental Agencies.
The first to hit the market was RentJuice. With over 10 years of research and some major venture capitalist funding, a Harvard business grad, David Vivero, founded RentJuice in late 2008. By mid-2009, they were providing web-based services for landlords and real estate brokers in Miami, New York and Boston. Their unique online platform, which connects prospective renters, brokers and property managers to each other in real-time, has become one of the leading providers of online rental relationship management software for real estate professionals. In 2010, RJ, collected $6.3 million in Series A financing from Lexington, MA-based Highland Capital. Additionally, in February Boston, MA-based NextView Ventures, and a group of high-profile individual investors, including Tim Draper, the co-founder of venture firm Draper Fisher Jurvetson gave another 6.2 million in funding to RentJuice. As a result,iIn March, RentJuice acquired its main competitor—Boston-based Kahoots
Today, RentJuice’s only real rival is YouGotListings, a much smaller startup, based in Boston, that emerged from the Y Combinator venture incubator this spring. Even though, it had only raised $150,000 in initial funding, in the short time they have been in business, YGL claims, they have captured 75% of the Boston market.
From what I have seen so far, this may in fact be the case. How? Well, especially with these “old-school” brokers, it’s all about cost. They provide the same services as RentJuice at fraction of the price. Additionally, they offer many free services to management companies and even brokers who can access those companies on the YGL network absolutely free!
Before he founded YouGotListings, Gordon Chen spent a summer working as a Boston rental agent researching his product. With his new-found knowledge, he was able to write the software and officially launch YouGotListings in February of 2009. With experience in Boston rentals and the relationships he built with the management companies in the area, getting these landlords to sign up for his free service was very easy to do. Once he had the listings, then he targeted brokers with the database software.
As a result, RentJuice’s plans to open an office here in Boston were put on hold. They even had to lower their prices just to stay in the game. Improvements were made on both sides so that the service offerings from each company were almost identical.
A Quick Comparison….
|Free Data Entry Services to Landlords and Management Companies||Yes||Yes. and free access to the YGL listings to brokers too|
|Easy” one click” syndication to Craigslist and 30+ advertising sites||Yes||Yes|
|integrated lead management and CRM system||Yes||Yes, but not as advanced at RJ|
|Deal Tracker and Performance Monitoring||Yes||Yes, but not as advanced as RentJuice|
|MLS integration||Yes,$29/mo extra||Yes|
Free individual agent sites and custom broker sites
|SEO and Analytics||No||No|
|Mobile App||No, but working on it||Yes|
|Price$||Under 100 users – $120/mo||Unlimited Users- $100/mo|
|Add-on Services||MLS integration – $49/mo
Data Entry – $149/mo
|Credit Checks – $4-$6
Data Entry Services – $100-$200/mo
Web Sites- start at $1000
Due to the nature of these “Data Entry” services for landlords and management companies, landlords that submit their listings via YGL will also make their way into the RentJuice databases, and vice versa. This new concept of data sharing is the key to each database’s success and level of customer satisfaction. On a broker level as well, brokers can choose which listings they want to share with other agencies by simply clicking a button, making it kind of like an MLS listing and available for co-broke. Of course, both systems integrate MLS listings as well. From a property manager standpoint, the real-time sharing of listings gave every broker instant access to their properties and could get them rented in no time. It lowered the barrier of entry to running a real estate agency and has allowed many agents to start their own brokerages without huge investments in technology. Also, new agents, without any experience at all, can start making money right away.
Let’s look at web traffic as an indicator of a company’s profitability.
A measure of a site’s popularity is calculated using a combination of average daily visitors and pageviews over the past 3 months. The site with the highest combination of visitors and pageviews is ranked #1
|343,545 Global Rank
60,277 Rank in US
36 Sites Linking In
|175,926 Global Rank
44,279 Rank in US
86 Sites Linking In
|1 month 309,161
|1 month 193,903
Where is the traffic coming from?
|Which sites did users visit immediately preceding rentjuice.com?
|Which sites did users visit immediately preceding yougotlistings.com?
What does this mean?
Well, as RentJuice is about twice as popular as YGL Globally, it is only slightly more popular in the US. (the lower the number, the higher the rank). Also, as the YGL site has grown in popularity over the last month, RJ’s rank has gone down by almost twice as much.
Another thing to look at is PPC advertising. Last month, RentJuice had a PPC Budget of $410 – $759, while YGL, on the other hand, had none. Even so, YGL’s gets a higher volume of search engine traffic and a larger amount of traffic from facebook and craigslist. So, as YouGotListings is concentrating on customer service, as they have said, their expansion is fueled by new landlords and management companies signing up each day. Word-of-mouth advertising and social media are the driving factors behind their growth.
So what’s next?
New developments in the technology are being made every day, and to keep their clients happy, these companies need to be on top of it. Mobile-apps are practically a given, (even though RentJuice has yet to release theirs). Looking forward, I see things like Cloud-based applications, and Tablet Applications, becoming more popular tools to for real estate professionals.
For brokers, now that everyone has instant access to the same listings, having exclusive listings and landlord relationships will be more and more important if they are to stand out from the crowd. Furthermore, full service agencies with equally successful sales and management departments will be those leading the industry.
Similarly, for RJ and YGL, adding sales and management software solutions that integrate seamlessly with an outstanding CRM system would be the next logical step. Combining other related services such as web development, SEO, and web marketing campaigns would be another logical step that I would like to see.
As far as advertising goes, being that both companies have automatic syndication to sites like Trulia, Zillow, and Craigslist, social media campaigns and direct website traffic will become more important for brokers as means of lead generation.
Questions? Comments? Is there another company worth mentioning? Let me know what you think…