By Stephanie Andre
RISMEDIA, Jan. 15, 2008-In a tough real estate environment, many brokers and agents are sustaining profitability by exploring new business avenues-like the rental market.
One company believes it is helping the cause. Borne out of the merger of three separate entities-RentalHouses.com, RentClicks.com and HomeRentalAds.com-the newly formed Rentals.com is quickly becoming a force in the rental housing market. Now owned by Consumer Source, a subsidiary of Norcross, Georgia-based Primedia, Inc., Rentals.com is forging ahead, focusing on new verticals while still perfecting its signature product-rental listings. In this interview, company Vice President Rob Massey and Robert Turnbull, president of Rentals.com, share their new ideas for the real estate rental market as well as why they believe now is a great time for homeowners to cash in on the home rentals craze.
Real Estate magazine: Can you briefly explain the focus of your company?
Robert Turnbull: At Rentals.com, we have a primary and secondary focus. The primary focus covers our core business-single-family homes-which is what RentClicks.com and Rentalclicks.com really focused on. That’s what we’re really best at. That said, on a secondary level, our domain name alone lends itself to a lot of real estate rental content and there are many different roads that we can go down with such a URL.
RE: Are there specific initiatives that you’re referring to?
RT: Yes. We recently launched a vacation rental portal. We also offer a Spanish-speaking product, which is highly important as it is a grossly underserved market.
RE: Please explain each new vertical.
RT: When we first started working on the vacation rentals, we quickly realized that we were doing double duty. Many of the same property managers that we had already been working with were also working in this arena. Now that we’ve begun getting used to the vacation rental market, we’re finally seeing some success and really buying into the market, even though it’s seasonal.
With regard to our Spanish-speaking content, 40% of the country speaks Spanish. So, we offer Rentals.com in Español. Non-English speaking visitors can list a property with a set-up wizard, enabling them to advertise their property to the Spanish community.
RE: What are the biggest distinctions between listing single-family and multi-unit rentals?
Rob Massey: The leasing dynamics are different, making each unique in its own way. With the large multi-family site-i.e. apartment communities-you can post an ad for one, two or three-bedroom apartments for a year. There’s generally a constant flow with these properties. For a single-family home, each is very unique and individual to that listing. Each has its own photos and descriptions.
We’ve created a site where anyone can go and have their listing live within minutes. Once rented, they can deactivate the ad. The biggest difference between the two listings is that a single-family home listing is periodic and the multi-family ad is ongoing.
RT: If you look at the demographics, renters looking for an apartment are generally 18-24 years old; 25- to 34-year-olds are looking for a higher-end apartment. With single-family homes, we generally see the 25-44 demographic, with a bend toward females. It’s a really broad demographic with a higher income. For an advertiser looking to get a property rented quickly, this consumer is a different kind of consumer.
RE: Can you compare Rentals.com to traditional classified ads in terms of cost and effectiveness?
RM: We’re a whole lot less costly and way more effective. As a former property manager, I know what it’s like to advertise in the newspaper-and abbreviate everything. People would call and I would answer tons of questions. Human nature as it is, the question that is most likely negative is usually asked at the end.
The great thing about using our site is that when someone calls on the phone, they’re already a very good prospect. They know everything about the property. We’ve built enough flexibility into our listings so that it automatically does a lot of prescreening. With a newspaper ad, there are too many callers that don’t qualify. The question to ask is: do you want to spend more time on the phone with non-quality prospects or do you want to just get it rented?
RE: How does posting a rental property ad on your site differ from an ad in the newspaper?
RM: Our site offers investors and property managers the ability to deactivate or reactivate an ad at their discretion. Generally speaking, an investor whose property gets rented-especially in a short timeframe-will go onto the site and deactivate the ad; they don’t want the calls. The investor is going to be more proactive about doing this than a property manager because the money is coming to them.
RE: What’s the biggest trend you’re now seeing in the rental industry?
RT: Right now, houses aren’t selling, so smart homeowners are coming into the rental business. Now, with stricter lending laws, we’re noticing that there are so many people who want to buy and can’t. Home rentals are going up because these people can’t buy, but still want to live in a house. It’s a supply and demand issue now. It’s good for the rental industry, but not as good for us because our inventory is down.
As an investor, now is the time to convert over to rentals because there’s such a demand. We say to investors: don’t let your property sit there for a year; that’s what we’re estimating before they’ll see a turnaround in the market. You should be renting these properties out while the demand is high and then bring them back onto the market. Also, renters they may already have in their homes may decide they’d like to buy that same home when the market improves.
When the sale market was strong, the apartment industry was moving to condos. The people who came into the tail end of that now can’t sell and have condos to rent. We saw so many apartment communities shift to becoming condo communities. Now, those same units are moving into condo rentals.
RE: It certainly seems like your company is gaining steam. What’s on the horizon for Rentals.com?
RT: We have a lot of possibilities on the horizon. We’re looking at commercial rentals, as well as military housing, college housing and more. We’re not sure which of these verticals we will pursue. That will have to come with time.
We will also be focusing on Realtors in 2008. We plan to reach out to Realtors through articles, Webinars, and industry events, with the goal of educating them on the rental marketplace. We are also integrating with brokers and multiple listing services to allow Realtors to seamlessly post their content on Rentals.com.
For more information, please visit www.rentals.com.