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We replaced rental brokers with software and filled 200 vacant apartments

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Re: We replaced rental brokers with software and filled 200 vacant apartments

#71

Post by __sy__ »

pedrosorio wrote: post #62
__sy__ wrote: post #58

Earlier quoted context omitted.

I disagree. Whether the prior occupant or the property management company has extra sets of keys, you generally don't want some random prospective tenant out there to have the keys to a unit that you will eventually want to rent out to another individual. For Airbnb's/STR's, same problem; guests returning to a unit much later to carry out illegal activities is rather well documented at this point. Across the board, i…

You agree with the person you replied to. They are saying guests may return to carry out illegal activity even if they returned the keys because they could have just made copies.

My initial comment only said that, in our experience, it's a bad idea to use physical key-exchange system for short-term visits of a physical space. Key copies & key returns being two examples of problematic cases. I only brought up key returns in my initial comment because that's the one that caused the most headaches at Sonder. Most people, it turns out, are honest but also forgetful :) The key-copy potentially exposes you to a lot more liability though...

Re: We replaced rental brokers with software and filled 200 vacant apartments

#73

Post by jedberg »

TillE wrote: post #60
mushufasa wrote: post #10

Earlier quoted context omitted.

0 value added for the tenant, but brokers typically serve the landlord.

I don't really get where brokers fit in. Most landlords should have the time/employees to take care of such things themselves. An absentee landlord would need a whole property management service to take care of everything, not just one small part. Brokers should be a niche service at best.

Not really. My parents used a broker for their rental. They manage the maintenance and rent collection themselves, but did not have the time or energy to do marketing/showing/vetting of new tenants.

And the broker they used basically does all the listings in the condo complex, so he has a steady flow of interested and vetted renters as well as standard leases that cover the specifics of the condo complex, as well as a relationship with the management office to get the renters approved quickly and get them keys for amenities and such.

In our case we pay the broker, but I can see a lot of value in their services for the landlord.

Re: We replaced rental brokers with software and filled 200 vacant apartments

#74

Post by d33lio »

cde-v wrote: post #6

Would love something like this to kill (or at least severely maim) the broker industry in NYC. 0 value added at the cost of 10-15% of yearly rent.

It's a huge hassle in Boston as well. Pretty boy hustle brokers deserve easy work that doesn't require real education so I can pay more to find a domicile - said no one ever...

Re: We replaced rental brokers with software and filled 200 vacant apartments

#75

Post by wly_cdgr »

Wonderful writeup with a great balance of readability and detail. Thank you for sharing!

TBH, this would work very well as an introduction to modern tech product development for a general audience - you could pitch this to the digital edition of the Atlantic, say, and probably get it in without much editing. It helps that the domain is so broadly relatable!

Re: We replaced rental brokers with software and filled 200 vacant apartments

#76

Post by an_opabinia »

literallycancer wrote: post #33
tut-urut-utut wrote: post #31

Earlier quoted context omitted.

The assumption that software can solve this problem is simply wrong. It's the regulation change that needs to happen if you don't want that renter pay the broker "services". For example, a new law in Germany to apply the "who hires pays" principle for brokers in the renting market basically made the renting "broker fee free" for renters. Previously, the landlords would hire a broker that needed to be paid by the rent…

So the landlords just make the rent more expensive to account for having to pay the broker, what changed?

> So the landlords just make the rent more expensive to account for having to pay the broker, what changed?

Nothing.

Clearly brokers are doing something or else people wouldn't pay for them.

My theory is the broker fee has positive selection for wealthier tenants, which for every property - low or high rent - makes for an economically better tenant. Raising the rent has the same effect. We care that there's cheap rent because shelter is a basic human right, and we appreciate that spending tons of money on rent couldn't possibly be good in a positivist economic sense, but of course raising the rent also selects for a wealthier tenant.

Replacing the brokers with software has a similar effect. If your users feel comfortable using a complicated website with no human beings involved, they are going to be wealthier.

This comes up everywhere. For example Oscar selects for a healthier insurance pool by being a complicated app - old people want real human beings to talk to and are turned off by apps, and they are also more expensive for insurance to carry, so it's a "win" for Oscar. Credit card only restaurants with lines make higher revenue because lower-ticket cash paying customers are substituted by higher-ticket credit card paying ones. And the iPhone is a $800 phone versus a $300 Android one, no wonder iPhone users spend 2-5x as much on IAP.

Re: We replaced rental brokers with software and filled 200 vacant apartments

#77

Post by stinkytaco »

cortesoft wrote: post #45
jandrese wrote: post #32

Earlier quoted context omitted.

Using the algorithm to eliminate leeching middlemen was one of the promises of the future. Real estate in general is full of middlemen looking for a cut and providing little to no value. The whole industry is overdue for a shakeup.

Sadly, our experience shows that 'the algorithm' becomes very centralized (because of the network effect), and suddenly this new middleman starts extracting fees comparable to the previous middlemen.

Please see: ticket sales: Ticketmaster, Stubhub, etc.

In theory, these make sense and reduce anti-consumer inefficiency like scalping that individual venues are not equipped to deal with. In practice, they extract fees. It's not that they are bad, per se, just that if the opportunity exists, someone with a spreadsheet will spot it, likely with the best intentions but no eye to the overall impact.

EDIT: To be clear, I think these services are a net good. Stubhub allows me to get sports tickets at a reduced price if someone can't go to the game. Ticketmaster stops people from spamming the system to gobble up tickets, it's just that these industries are now going to want a fee for that and we end up back where we started. I'm sure at one time brokers were helpful as well (a landlord free way to compare properties).

Re: We replaced rental brokers with software and filled 200 vacant apartments

#78

Post by __sy__ »

wly_cdgr wrote: post #75

Wonderful writeup with a great balance of readability and detail. Thank you for sharing! TBH, this would work very well as an introduction to modern tech product development for a general audience - you could pitch this to the digital edition of the Atlantic, say, and probably get it in without much editing. It helps that the domain is so broadly relatable!

The illustrations were solid too.

Re: We replaced rental brokers with software and filled 200 vacant apartments

#79

Post by nacho2sweet »

Making being a landlord easier and more disconnected from people and your tenants etc for the investor class. What a great product for society and wealth inequality. Love it!!! Put an algorithm on judging if someone deserves shelter, we have never seen any problems with this in past studies!! Maybe one of the most evil things I seen on here in awhile tbh.

Re: We replaced rental brokers with software and filled 200 vacant apartments

#80

Post by dangerwill »

__sy__ wrote: post #37

We started Seam (YC S20) a year ago to take on the problem of programmatic access to physical spaces (apartments, single-family homes, commercial buildings...etc). Basically one API that can open any door (smart locks, elevators, commercial buildings...etc). We're still in private beta but feel free to reach out if you're struggling with programmatic access. tbh, it's baffling that in 2021, this problem is still so d…

Speaking of logistical headaches, what happens with your system when the power goes out in a building?
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