THE RECENT ASX listing for rent.com.au Ltd (RENT) has propelled the company into a dynamic phase of growth as it moves a step closer to its goal of becoming the ‘Home for Renters in Australia’. CEO and Founder Mark Woschnak shares some insights into the company’s seven-year journey and future vision.
Rent.com.au has just listed on the Australian Securities Exchange (ASX). What opportunities does this listing provide for you, and for the property management industry in Australia?
The listing represents a significant milestone in that it enables us to take the next step towards achieving our vision of becoming the ‘Home for Renters’ in Australia. Our listing in June, and the associated capital raising, reflects progressive and sustained growth over the past seven years and consolidates our market-leading position in the dedicated national rental sector.
Since the commencement of operations in 2007, we’ve focused solely on the rental market and have been driven by the strong belief that the rental market in Australia is under-serviced. The renting population of Australia is going to continue to increase and the business is strategically poised to move directly into this dynamic growth phase.
Having now built the IT, infrastructure, product service and mobile platforms required, we can now shift our focus towards a commercial phase and create a household consumer brand that adds value at a broader community level.
To date, our level of national traffic has provided strong enquiries and results for agents in many areas, but a very low response in others. This was a function of our growth and we now look forward to raising our brand awareness and increasing the level of enquiries across the nation, targeting over 500,000 unique visitors monthly over the next year, and over one million in time. This is just renters, of course, not homebuyers. Our goal is to leverage our online position to deliver consistently a high volume of timely and relevant renter and landlord leads to all property managers who use our site.
The team at RENT is passionate and committed to this unique opportunity. The new capital also allows us to respond immediately to market needs by employing around 30 more staff members to deliver a broader range of products and services, and provide even more customer service to property managers and the wider community.
We look forward to working with all industry participants to make a positive and sustainable difference to the Australian property management industry.
How are you creating the rental marketplace?
Looking at global benchmarks, we see that creating a ‘marketplace of rentals’ is crucial to providing renters with a first-class search service with the widest possible range of rentals via agent and private landlord listings.
We’ve grown substantially over the past six months alone, with over 6,150 individual agencies registered to rent. com.au (representing approximately 80 per cent of all agent rental listings nationally). This growth means that nearly 30 per cent of all renters in Australia used rent.com.au over the past financial year to help find their rental property.
Through the provision of comprehensive information and innovative service solutions, such as our new mobile responsive design, plus add-on services like RentCheck and unique RentBond products, we are constantly improving the level of excellence and searchexperience for renters.
What growth do you see in rentals?
We think the rental industry is extremely under-serviced relative to the property- for-sale environment. This alone provides a great opportunity for improvement, but we believe that the most significant growth in rentals will come from the sheer volume and shift of the current 30 per cent of the population who currently rent to a much higher percentage of the market, and this is starting now.
Many commentators, government and other statistical agencies suggest that our capital cities are likely to follow the trend of most other major capital cities in the world, whereby 50 per cent or more of the population rent, and that we could reach these figures within a decade.
While the average In Australia is about 30 per cent across the nation, this trend is already evidenced by many of our capital cities, especially Darwin at 47 per cent, Sydney at 35 per cent and Brisbane at 34 per cent. We see this is a growing trend, with the other capital cities following suit over time.
This current and forecast growth is not just due to housing affordability issues, but because renting is becoming a conscious lifestyle and investment choice by many and work trends are changing, with our surveys showing an increasing percentage of renters who have no desire to own a property.
What does this mean for property managers?
As the first ASX-listed property portal dedicated solely to property management, we see a lot of growth ahead and a great opportunity to partner with the agent industry to provide better services and more knowledge to property managers.
The type of renter growth anticipated means that there will be a significant and increasing emphasis on rental marketing, rental services, rent rolls and focus on property investors in the years ahead. This is the beginning of a significant, long-term growth phase for the property management profession.
As the process of managing a rental becomes more regulated, we see enormous opportunity for property managers to target and convert the ‘non-agent managed’ rental market share of approximately 46 per cent to ‘agency managed’. This doesn’t just include a typical private landlord, but also the other non-agent property owners such as corporates, builders/developers, charity groups and government agencies, who will require increasing levels of property management services.
RENT allows all property managers to benefit, as it offers a free listings service as well as the opportunity to take up a range of paid subscription services which provide greater benefits. Many of our services are provided on a ‘first-in basis’, so now is a very good time to subscribe to RENT as we gear up for our expansion objectives.
Our marketplace at rent.com.au not only provides better letting results to a wider and unique audience of renters (about 50 per cent of whom do not go to REA or Domain), but also to agents, with huge opportunities to market their professional services to this large non-agent market share, representing approximately 1.2 million rental properties. We deliver a range of localised services that provide agents with business development opportunities and leads from private landlords looking to appoint a property manager.
What are the benefits for property management businesses to use a portal which is dedicated only to property management?
The most significant benefit for the industry comes out of our pure focus on rentals. This allows us to look deeper into the processes, from a whole of market viewpoint, and work proactively to create innovative solutions and provide better products and services for property managers.
We actively work with franchise groups, independents, trainers, educators, software and product suppliers to ensure that the focus of property management continues to the levels it deserves.
By creating a portal that focuses solely on the rental process, we can eliminate time- wasting and frustration experienced by renters and more accurately address their needs and those of the wider industry.
For property managers, we are acutely aware of providing excellent value for money, and this is represented in our low pricing model, subscription packages, listing upgrades and reports. An example includes our ‘RentBond’ product that allows renters to have their bond paid upfront to agents, and up to six months to pay it off without any deposit paid or interest charged.
As we significantly increase our marketing and branding of the site by creating this central marketplace, we can facilitate greater economies of scale for property managers in getting enquiries and services at lower costs.
What are some of the add-on services that rent.com.au will be providing in the next 12 months?
We will continue to focus on building the marketplace for renters, property managers and private landlords. We have identified dozens of new services that we are working on, including quotes for services that renters need when moving, such as cleaning, removals, storage and insurance.
For property managers, the next range of additional services relates to better qualification of renters, inspection services, easier appraisals and more connectivity with after-letting functions such as utilities connections. There is also a worldwide trend towards the use of much more video in all aspects of property management, and we aim to provide our first range of these services.
What are some of your other goals for rent.com.au in the next 12 months?
Our most important goal is to raise the awareness of RENT and to target over 500,000 renters to the site every month. In developing and facilitating the fast growth of the www.rent.com.au marketplace, we will be using our other supporting assets of rentalproperty.com.au, propertymanager.com.au and lease.com.au, and are in the process of redeveloping these.
There are some analysts saying it’s possible that rent.com.au could be the next realestate.com.au. What are your thoughts on that?
We have a clear and sole focus on rentals and have no plans to become a general portal or property-for-sale portal. We don’t see ourselves as competition to REA or Domain; instead, we will focus on the under-serviced rental sector, and therefore represent an important complementary addition to the online marketing mix for any agent. The business of renting is very different to that of property for sale, with different functions, different services, timing and demographic audiences. The size and scale of REA is enormous and very successful in the sector they operate in, so we are not making direct comparisons of our business against REA or any other.
Our focus will continue to be on consumer branding and the quality and depth of services in the renting marketplace for the benefit of all participants.
Can agents be a part of the ASX listing opportunity?
Many agency principals, property managers and industry service providers have asked us this question. The answer is yes, and many have invested already as shareholders.
Anyone can buy shares via a broker and we think now is a good time to invest because the business is at the beginning of its marketing and product development growth phase. As a business that is solely focused on the property management industry, many investors from the industry take comfort in this because they understand the market, and know first-hand the opportunity that lies ahead.