From iBuying to iRenting: innovation in residential real estate
Over the past five years, the process of selling a home has undergone a radical transformation triggered by the “iBuyer” – a real estate company that buys and sells properties using technology. Opendoor created the category in 2014. Several other tech-focused companies like Zillow, OfferPad and RedFin have entered the space since.
IBuyers’ proposition is quite simple and quite compelling: sell your house to us for a reasonable price without all the hassle, then we’ll fix it and resell it at a margin. This is probably why, according to Mike DelPrete’s 2020 iBuyer report, the niche doubled in market share from 2017 to 2018 and again in 2019, accounting for over 0.5% of home sales in the United States.
While this tech-driven phenomenon has shaken up home buying, a similar innovation has yet to reach the other side of the housing market: residential rentals. Enter REZI, a real estate technology company on a mission to adopt and transform iBuying into a new category: iRenting.
Property owners have various costs built into the traditional rental process: including agent fees, tenant concessions, and listing deadlines (market days). These hidden costs can lead to a difference between the asking rents and the actual rents for a newly vacant apartment of up to 35%. iRenting, however, increases net effective rents as iRenters technology reduces these hidden costs. Not only do landlords earn more per unit, but they also avoid taking on the credit risk of individual tenants. The iRenter becomes the owner’s tenant and assumes the risk of finding long-term tenants to sublet the apartments.
As an iRenter, REZI enables owners and tenants to rent apartments more efficiently. For owners, REZI’s offer is as convincing as that of iBuyers for owners: rent your apartment in REZI for a guaranteed monthly rent, without interruption of vacancy or tenant credit risk.
Unlike the iBuying model, REZI’s iRenter model does not include repairing, flipping, furnishing or modifying the space. Instead, it leverages a suite of AI-powered technologies to correct the rental experience itself to create additional value by minimizing or eliminating vacancy and placement costs. By using data-driven pricing, personalized omnichannel marketing, contactless visits, automated due diligence, and digital leasing, REZI is able to significantly reduce rental costs and pass some of the savings on to owners.
As the example above shows, REZI can generate 10-20% additional revenue over the life of each vacant lease. REZI retains a percentage of the additional income while passing the balance on to landlords by paying them a higher effective net rent than they receive through a traditional rental process.
Additionally, landlords who use iRenters also minimize the operational headache of finding and qualifying tenants. Just as iBuying simplifies the intricate details of selling a home, iRenting automates leasing so owners can focus on high-value tasks such as raising capital, improving capital, or expanding their home. their wallets.
In a market defined by uncertainty and high costs, iRenters like REZI offer homeowners certainty and higher revenues. As landlords seek to better manage vacations and operating costs resulting from the pandemic, these solutions provide seamless access to optimal rental income. The power of the iRenter model has the potential to revolutionize rental, as does the impact of iBuying on the housing market today.
Learn more about REZI and how iRenting can improve portfolio performance by visiting leasing.rentrezi.com.