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The team, which was part of the Y Combinator Summer 2011 class, started off originally with the idea of auctioning off apartment rentals. Auctioning rentals?

The team, which was part of the Y Combinator Summer 2011 class, started off originally with the idea of auctioning off apartment rentals. Auctioning rentals? Seriously? Just what the world doesn't need: yet another tool to "help" landlords inflate rents by further distorting market data about housing supply and demand. Purchaser practices (like auctioning and credit discrimination) don't belong in the renter's sphere. When will a startup build something that actually _helps_ renters? the startup plans to make money from landlords based on the number of listings they manage using the platform. Landlords tend to pass the cost of pretty much everything onto their renters, so let's make a theory about what this will do to the cost of rent in an area.

dazbradbury 14y ago
let's make a theory about what this will do to the cost of rent in an area. In the UK at least, the option for landlords to spend £20 to advertise their rental (in our case on Rightmove), obtain a contract, conduct referencing, handle the deposit and other traditional agencies services, is resulting in landlords being able to lower their headline rental fees. Our landlords have traditionally listed at far below what the same property is listed at with a traditional agent. So these savings are, in part, passed on to tenants. One must remember that agents will charge landlords 5-11% of the annual rent just to find a tenant, plus the hundreds of pounds they charge tenants in admin fees. This does not even include management fees. Removing these unjustified fees, and creating a fair marketplace, can only benefit tenants rather than harm them. That is at least what our intention is with OpenRent.
clumsysmurf 14y ago
Yes, I wish there were more tools to help renters. The whole process is plagued by information assymetry with regards to transparency, and the renter is at a huge disadvantage. BadNYCApartments is trying to do something about this, but as far as I can tell, its NYC only still. For example, some things I would like to know before renting a unit: 1) what persistent problems has this specific unit had? I live in a complex that spans an entire block. I can not find such information for this unit. 2) what kinds of "fees" does this landlord add to rent? And what are those fees on average? Our landlord just recently (without anyone's approval) got Valet garbage removal. I'm amazed such a thing could exist. The dumpster is right there, but we are now being charged $35/mo for something that nobody wants. And there are more animals and bugs in the area. More people snooping around. The fees are being added when the lease is up for renewal. 3) What is the average rate increase between renewals? 4) Smoke free areas. Without getting into the debate of whether this should be regulated; I would like to know how I can find buildings which are smoke free. For a number of years, a chain smoker in the building caused problems for almost everyone, as the secondhand smoke escaped his unit and migrated to the ventilation systems of everyone else. The landlord may try to help, but often there is little that can be done (and this is, unsurprisingly, very common according to the ALA). When he moved out, a few prospective tenants changed their mind because that unit still smelled like smoke after it was turned over. I was sad to see a young lady move into said unit recently, I wonder if she would have if she knew the place was likely a toxic cesspool. It still smells like smoke even with multiple passes of ozone generators. In addition, its unlikely that unit will ever be free of contaminants. http://health.usnews.com/health-news/family-health/allergy-and-asthma/articles/2010/12/17/smokers-former-homes-may-retain-tobacco-toxins http://health.usnews.com/health-news/family-health/allergy-a... 5) What is the average amount of noise here? Noise is classified as pollution. I can guess from how close it is to a street, but there are lots of other factors.
- planetguy 14y ago
  On the other hand it would also be nice to have an equivalent site, BadNYCTenants, so that deadbeat tenants could be easily tracked and blacklisted.
pumblechook 14y ago
I live in a major metro area and have moved each year for the past 5 years, and each year is worst than the last. Renters need SERIOUS help.
planetguy 14y ago
I'm confused as to how auctioning rentals would distort the market. All a landlord needs is one tenant who is willing to pay $N a week. An auction is just an efficient way of finding the appropriate value of N. There are other issues which make auctioning rental properties a bad idea though. Auctions are good in situations where the appropriate price is unclear; in most rental markets it's fairly clear to everybody roughly what a given apartment is worth, though, plus or minus five or ten percent. The second issue is that as a landlord I'd much rather have a good tenant who I think is likely to be able to pay the rent than a tenant who looks bad on paper but is willing to pay an extra ten bucks a week; so I don't automatically want to choose the highest bidder as my tenant.
- nabraham 14y ago
  Nailing the 5%-10% delta could be huge. The yield management software used by big property companies promises 2%-5% improvement and that is a billion dollar business. Additionally, a more realistic choice facing the landlord would be picking between a "good tenant" on paper paying the rent, and a "bad tenant" on paper willing to pay an extra $250/month.
tgrass 14y ago
A startup will build something that actually helps renters when renters exhibit a willingness to pay for it.

dazbradbury 14y ago

let's make a theory about what this will do to the cost of rent in an area. In the UK at least, the option for landlords to spend £20 to advertise their rental (in our case on Rightmove), obtain a contract, conduct referencing, handle the deposit and other traditional agencies services, is resulting in landlords being able to lower their headline rental fees. Our landlords have traditionally listed at far below what the same property is listed at with a traditional agent. So these savings are, in part, passed on to tenants. One must remember that agents will charge landlords 5-11% of the annual rent just to find a tenant, plus the hundreds of pounds they charge tenants in admin fees. This does not even include management fees. Removing these unjustified fees, and creating a fair marketplace, can only benefit tenants rather than harm them. That is at least what our intention is with OpenRent.

clumsysmurf 14y ago

Yes, I wish there were more tools to help renters. The whole process is plagued by information assymetry with regards to transparency, and the renter is at a huge disadvantage. BadNYCApartments is trying to do something about this, but as far as I can tell, its NYC only still. For example, some things I would like to know before renting a unit: 1) what persistent problems has this specific unit had? I live in a complex that spans an entire block. I can not find such information for this unit. 2) what kinds of "fees" does this landlord add to rent? And what are those fees on average? Our landlord just recently (without anyone's approval) got Valet garbage removal. I'm amazed such a thing could exist. The dumpster is right there, but we are now being charged $35/mo for something that nobody wants. And there are more animals and bugs in the area. More people snooping around. The fees are being added when the lease is up for renewal. 3) What is the average rate increase between renewals? 4) Smoke free areas. Without getting into the debate of whether this should be regulated; I would like to know how I can find buildings which are smoke free. For a number of years, a chain smoker in the building caused problems for almost everyone, as the secondhand smoke escaped his unit and migrated to the ventilation systems of everyone else. The landlord may try to help, but often there is little that can be done (and this is, unsurprisingly, very common according to the ALA). When he moved out, a few prospective tenants changed their mind because that unit still smelled like smoke after it was turned over. I was sad to see a young lady move into said unit recently, I wonder if she would have if she knew the place was likely a toxic cesspool. It still smells like smoke even with multiple passes of ozone generators. In addition, its unlikely that unit will ever be free of contaminants. http://health.usnews.com/health-news/family-health/allergy-and-asthma/articles/2010/12/17/smokers-former-homes-may-retain-tobacco-toxins http://health.usnews.com/health-news/family-health/allergy-a... 5) What is the average amount of noise here? Noise is classified as pollution. I can guess from how close it is to a street, but there are lots of other factors.

planetguy 14y ago
On the other hand it would also be nice to have an equivalent site, BadNYCTenants, so that deadbeat tenants could be easily tracked and blacklisted.

pumblechook 14y ago

I live in a major metro area and have moved each year for the past 5 years, and each year is worst than the last. Renters need SERIOUS help.

planetguy 14y ago

I'm confused as to how auctioning rentals would distort the market. All a landlord needs is one tenant who is willing to pay $N a week. An auction is just an efficient way of finding the appropriate value of N. There are other issues which make auctioning rental properties a bad idea though. Auctions are good in situations where the appropriate price is unclear; in most rental markets it's fairly clear to everybody roughly what a given apartment is worth, though, plus or minus five or ten percent. The second issue is that as a landlord I'd much rather have a good tenant who I think is likely to be able to pay the rent than a tenant who looks bad on paper but is willing to pay an extra ten bucks a week; so I don't automatically want to choose the highest bidder as my tenant.

nabraham 14y ago
Nailing the 5%-10% delta could be huge. The yield management software used by big property companies promises 2%-5% improvement and that is a billion dollar business. Additionally, a more realistic choice facing the landlord would be picking between a "good tenant" on paper paying the rent, and a "bad tenant" on paper willing to pay an extra $250/month.

tgrass 14y ago

A startup will build something that actually helps renters when renters exhibit a willingness to pay for it.