As the world evolves to keep up with rapidly changing technology, there is one industry that seems to be left behind – renting a place to live. A Chicago-based startup, Rentalutions, has been working to change that, bringing the rental and leasing industry into the new digital era.
The application process to rent a new apartment or home is currently consumed with paperwork, often with added fees, security deposits, and background checks that make the entire process complicated and time-consuming. When tenants pay rent, they usually put a check in an envelope, which means landlords that own several properties have to physically deposit all of these checks.
It was this outdated process that convinced Ryan Coon to leave a career in investment banking and start Rentalutions with his friend, Laurence Jankelow. After talking with friends and family about the challenges in the real estate business, they became aware of these practices. “It was so primitive to us,” said Coon. They decided there had to be a better way.
At first, their clients were people who were hit hard by the crashing housing market. When people couldn’t sell their homes, they often turned to renting. However, they didn’t know how to begin navigating the complicated web of regulations and property management tasks. Rentalutions first began as a one-stop shop to make the rental process easier for these “accidental” landlords.
When the housing market recovered, the typical clients started to change. People began buying real estate with the intent of renting it out. “As [the accidental landlord] market started to shrink, we started to see people who were buying properties,” he told Opportunity Lives.
The Rentalutions website provides a variety of services to landlords – everything from digital applications (with automatic background and credit checks) to digital leases to online payments and maintenance tracking. “The alternative to using something like us is that they would go out and figure all of this out on their own or hire a property manager who would charge 10-15 percent of every month’s rent,” said Coon.
Landlords often list their properties with Rentalutions, which automatically syndicates them across the Internet. Then it’s easy for the landlords to transition into using other services as well. Though the first unit is free, adding additional units requires a modest monthly subscription fee – for example, it costs $25 per month to manage up to 5 units with the Rentalutions service.
Right now, there are about 8,000 individual owners across the United States who use the Rentalutions platform. Tech-savvy cities such as Seattle or Austin typically have higher adoption rates, said Coon.
“The renters love it, because they’ve been writing checks for years,” said Coon. The online system minimizes payment timing discrepancies and eliminates the chance that a payment could get lost in the mail.
What’s coming next for Rentalutions? Coon said that there are many exciting opportunities on the horizon. “As a technology company, we need to always be innovating,” he said. Rentalutions will soon be partnering with several financial services companies to offer landlords more services, and they are thinking about developing a mobile app too.
Looking back, Coon is amazed at the obstacles the company has overcome. Convincing a bank to help structure the online-payment system took a long time, as did developing a digital lease that complied with the necessary regulations. But they made it. “If you’re doing something you’re passionate about and you care about, you’re a lot less likely to give up,” he said.
“Starting a business is fun,” said Coon. “With the cost of technology coming down, there’s never been a better time.”