At last, our long national rental nightmare is over—the small apartment market is finally making strides towards the 21st Century.
And wouldn’t you know it? San Francisco is at the heart of it. No surprise there—San Francisco, with its tech-friendly reputation, is an absolute nightmare for renters.
Things have improved in recent years, for sure. We’ve made big strides in finding listings. Apartment List has practically perfected what Craigslist started, partnering with hundreds of databases to consolidate every apartment listing into one service—and its new sister app, Roommates, uses Facebook information to match potential roommates based on similar interests, friends, and rental preferences (like neighborhood and budget.)
But it’s easy to forget upon filling out your twentieth application that this process isn’t optimal for landlords either.
According to Cozy.co CEO and co-founder Gino Zahnd, there are over 40 million rental units in the United States. “Seventy-five percent of those are in buildings with 20 units or fewer,” says Zahnd. “That makes for a whole lot of small landlords.”
These small-scale landlords might be more personable than a large broker, but they lack access to the same tools and resources. Until recently, there’s been no real way to digitize dealings with small landlords in a cost-effective manner.
But two San Francisco-based startups are looking to change that: Lovely and Cozy.
You might recognize Lovely—it’s been around a few years now, though primarily as an apartment listing service.
“[Lovely has] done extremely well, especially in a market like San Francisco where it’s extremely competitive and you need to have an edge when it comes to landing that apartment,” says Lovely CEO Blake Pierson.
And what’s done well for them is status quo. Lovely adds features regularly, but at the end of the day it’s a company trying to replicate old patterns in the digital era.
Take credit checks. Lovely just announced a new partnership with Experian—when you send out your prefilled application to a Lovely listing, you’re automatically charged $20 and a copy of your Experian credit report is attached.
“[Landlords are] able to take the numbers around the credit profile and the face-to-face meeting and combine the two to make a more quick decision rather than having the face-to-face meeting and then sending the application out to a third-party processor to run the credit check,” said Pierson.
And the fee? “We try to not change existing behaviors. Renters are used to paying application fees so in our eyes we can make that a little bit better by having them not have to pay as much,” says Pierson. He says most landlords currently charge between $30 and $40 for credit reports.
Pierson hints Lovely is still expanding. On November 21st, the company announced that it acquired Rentmatic, a rent collection and recurring payments company that already processes $25 million in payments, according to Lovely spokesperson Elizabeth Pietrzak.
“We started out helping people find apartments, but it’s been our vision from the beginning to really have a platform and marketplace that helps people even after they’ve moved in,” Pierson says. “If their sink breaks, being able to send a maintenance request to their owner—or make their monthly rent payments. That’s been our goal.”
Enter Cozy. Cozy, unlike Lovely, is a true start-up—little more than a baby, only a few months old.
“For landlords we currently do two things: we make it super easy to accept online rental applications, and then we also make it super easy to collect rent,” says Zahnd.
Like Lovely, prospective tenants build out a single profile they use to apply across all listings. “The app is about 20 percent of the length of a standard [National Apartment Association] application. It takes about five minutes to complete the entire thing because we’ve automated so much of it,” says Zahnd. You can even tie your Cozy profile to your LinkedIn account to verify employment.
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