Disrupting the NYC Rental Market

Disrupting the NYC Rental Market

There was a good article on the basics of disrupting an industry, it comes from a book here. So much has been made of the Uber’s/Lyft’s of the right now. But disruption is not new, it’s just a new buzzword for innovation or transformation. When Steve Jobs brought down record companies nobody called it disruption, he transformed the music industry from it’s entrenched ways and dragged it to the 21st century. Of course you can say he disrupted that and other industries and it would probably fit his style more. The word itself is more iconic now because it brings fear to the old way of doing business, it’s a more in your face of way of saying we are going to find a cheaper and streamlined method of doing what you do only better and it most cases use technology.

Thus this brings me to NYC real estate, rentals to be more exact. If there was ever an industry that needs to be redefined and standardized, rentals would be it. The nature of the process is archaic, still based on old relationships, bloated overheads, fax machines, dated information and dodgy landlords/agents.

I’ll go over each step in various posts but lets begin with the first:

Here is the formula:

1. Eliminate your industry’s persistent customer pain points.
2. Dramatically reduce complexity.
3. Cut prices dramatically
4. Make stupid objects smart.
5. Find smarter ways to serve your customers.
6. Be utterly transparent

1. Eliminate customer pain points

In NYC real estate this boils down to a few things:

A) Searching for properties that are accurate and real
B) Application paperwork and process
C) Brokers commission/fee

Each of the above represents a customer pain point but the first is where every client starts. Is there a better way to search for apartments whether using a broker, online, or direct to landlords? Searching for an apartment online using sites like Craigslist, Zumper, Trulia, Streeteasy, Naked Apartments, Renthop and others is a pain into itself, they all suffer from outdated listings or multiple postings of the same apartment, ghost listings, mispriced or other factors. As we see below, a map based search with filters presents a great way to find apartments. (See why your brokerage should introduce it here) but still suffers from the above same pain points. 

 

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This is why brokers still dominate the NYC market. 10k plus apartments is a lot to sift through. Whats real and not? What’s still available? Are those photos of the actual apartment? The truth is even most agents aren’t sure of availability, photos and in some cases pricing. 

So how do you make this “Pain point” less so, well it’s actually quite easy yet incredibly hard. Clients need to physically be in the apartment to see if it meets their needs. But heres the thing, we order food without seeing or tasting it first. We buy clothes without trying it on, Are we ready to rent apartments the same way? Yes and no. A meal delivered can be returned and money refunded, same goes with shopping online. With a rental, that’s yours for a year like it or not. 

Take the search out of the clients hands all together.

How do we achieve this?

1) Get defined parameters from your client.

2) Search for your customer and either send them photos or set up an appointment to view listings.

3) Only meet if those parameters match perfectly. 

Now is a client still going to search for apartments without you? Of course. Expect them to fall for the shams and other agents, brokers, and websites to claim the best unit there is for an unbelievably low price. Thats human nature.

This is why brokers (for now) are indispensable, they have access to landlord listings and while the information chain breaks down a lot it still works for the time being.

Note: Client needs can change on a dime, a new pet, lost job, etc.. All have a ripple effect through the entire process. Every client represents a different variable, depending on budget, apartment type, income, credit, move date, etc.. If you were looking for a $3500 1 bedroom on the Upper East Side in a luxury building you would have plenty of choices and odds are your income and credit are pretty good, most of those buildings have on site leasing so the application process would be easier to navigate, and typically finding a luxury building on your own the management would offer an incentive to lease the unit or at the very least there would be no fee at all.  

I will add more as this is a complicated market to dislodge from it’s current form.

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