Civilizing the Rental Market with Web 2.0 Tools
There are few things in life more stressful than finding a decent apartment—or, if you’re a property owner, finding a decent tenant. It’s often one of those frustrating situations where each party has to make a decision without sufficient information. Is this landlord charging a reasonable rent for the neighborhood? Will this guy pay up every month? There’s no way to know, so mutual suspicion reigns. And in a city like Boston, where there are tens of thousands of rental properties and where thousands of students, medical residents, and instructors come and go every September 1st, the pain is multiplied many times over.
Over the last few years, Craigslist and other online listings services have started to make the annual apartment shuffle easier on both sides. And now there’s a Newton, MA-based startup, Investment Instruments Corporation, dedicated to taking more of the mystery, risk, and labor out of the process.
Investment Instruments’ Rentometer Web mashup, launched last year, lets renters and landlords compare the going rates for similar rental units in a given neighborhood and plot them on a Google map. Its subscription-based iiProperty service helps small-to-middling landlords manage multiple online listings and stay in touch with tenants, so that the rent keeps rolling in. “Our mission is to increase transparency in the residential real estate market and make it easier for tenants, owners, and professionals to conduct their real-estate-related business and transactions,” says Allison Atsiknoudas, Investment Instruments’ co-founder and CEO.
For property owners, iiProperty takes the place of the mess of spreadsheets, paper notebooks, and other systems many small landlords use for tracking property information, invoices, accounting, and—perhaps most importantly—advertising vacancies. The company’s focus is on landlords with 55 units or fewer—often people like doctors, lawyers, or other professionals in businesses other than real estate who manage their properties on their personal time and are therefore willing to pay $13 to $65 per month for a subscription to the service (the price depends on the number of rental units being managed). “It’s a very fragmented market of professionals who are doing this at lunch or on the road, so they really demand a Web-based management system,” says Atsiknoudas.
Using iiProperty, landlords can bypass rental agents and create a single home page or “Webflyer” for each vacant property. The system can automatically submit listings for each property to Craigslist, Google Base, Oodle, Edgeio, Investment Instruments’ own listings at Rentometer.com, or even to print newspapers (the struggling but not-quite-extinct dinosaurs of the rental industry).
The company’s tools are also popular with real estate agents, many of whom manage their own property or clients’ properties on the side. “There are management companies and brokers who use the Rentometer almost on a daily basis to check how their rents compare to the market,” says Atsiknoudas. “We don’t suggest that people either raise or lower their rents—we’re just giving them a quick estimate of the current market.” The Google maps come in handy, Atsiknoudas says, because the closer the proximity between two rental units, the more accurate and useful the Rentometer’s estimates will be.
The Boston area isn’t as prominent as a hub for Web 2.0 businesses as, say, San Francisco or Palo Alto. But both of Investment Instruments’ services were built using standard Web 2.0 software toolkits like AJAX and Ruby on Rails, and both exemplify the overarching Web 2.0 ethic of using simpler information-management tools to shift power to users.
All three of the angel-backed startup’s founders—Atsiknoudas, president Owen Johnson, and CTO Jeffrey Krause—were graduate students at MIT and have been on the renters’ side of the fence, according to Atsiknoudas. At the same time, they’ve all moved on to become property owners and landlords at various times in their careers. “We’re definitely in the same categories as our customers,” Atsiknoudas says. “So we can definitely relate to the pain points that exist.”
Atsiknoudas herself is just as comfortable designing or rappelling off a building as she is a renting one. The retired U.S. Army officer graduated from the Army’s Airborne School, Air Assault School, and Rappel Master School, earned an M.S. in architecture from MIT, and managed Army properties in Europe worth more than $1 billion.
“Having managed a fairly large portfolio for the government in Europe, including new work that we were designing and constructing and a combination of health care, commercial, and residential campuses spread over five countries, I have direct experience with what it takes to keep properties going,” Atsiknoudas says. “I think our combined experience is pretty unusual.”
Investment Instruments has a West Coast office in San Francisco and users spread across North America, with concentrations in California and the Northeast. While other companies offer rental-management systems geared toward owners with thousands of units, Investment Instruments is secure in its market niche, Atsiknoudas believes. “There isn’t really any company out there that we’re aware of that has a goal of creating services for renters, owners, and professionals, and going after that problem of transparency and arming all parties with the same information,” she says. “It takes a lot of the emotion out of the situation. I think that [both renters and landlords] really appreciate that.”