The downturn in the economy over the last few years has forced several people, into becoming landlords. People who had a great deal on a house before the economy went down, were forced to start renting property. They wanted to hold onto their property and at the same time make money to pay their mortgages down so these new properties weren’t a total write off.
A Chicago Startup, incubating at 1871, called Rentalutions is there to help those landlords and then tens of thousands more who’ve been renting out property for years.
Rentalutions is a complete landlord tenant system. Tenants can set up recurring rental payments using the system. They can also turn in maintenance requests around the clock and communicate with their landlords directly.
For landlords, Rentalutions is one centralized system that keeps up with just about every aspect of renting property. The platform even allows landlords to list a vacant property and screen for potential tenants within the system. Once they take on a new tenant they can convert that record to a tenant record without having to re-input data over and over again.
Rentalutions, founded by two long time friends Ryan Coon and Laurence Jankeow, hopes to become the complete turn key system for the over 6 million do it yourself landlords across the country. The company provides do it yourself landlords with similar resources that some of the top property management companies are using.
We got a chance to interview Coon. Check out our interview below.
What is Rentalutions?
Rentalutions provides do-it-yourself landlords with the education, guidance and tools they need to efficiently manage their properties throughout the rental cycle. The recent financial crisis created over 6 million first-time, accidental landlords. Accidental landlords are individuals who purchased homes and condos before the crash and, because of a life event such as marriage or relocation, had to move. They didn’t want to sell the property because the equity value deteriorated so much, so they turned to renting the property. The problem is that they often don’t know the first thing about being landlords. We want to help them save time, save money and avoid frustration.
In layman’s terms, how does it work? (In other words how would you explain it to your grandmother)
After signing up for our service, landlords can either invite their existing tenants to sign up or use our service to find and screen new tenants. Existing tenants who sign up will be able to start paying their rent electronically and be able to set up recurring monthly payments. They can also submit new maintenance requests through the system. If a landlord has vacant units (no tenants), he can use our site to find and screen potential new tenants. We do this by syndicating his listings out to popular listings sites. Once tenants express interest, they can submit their rental application online and authorize the landlord to pull his or her credit report. Once approved, the landlord can create a custom, fully-electronic lease agreement that both parties can sign electronically. This reduces the headache that often comes with faxing lease forms back and forth. Once the lease is signed, tenants can pay their security deposit through the system and begin making rent payments too. Payments are automatically deducted from tenants’ checking accounts and deposited into the landlords bank account. If there are ever maintenance issues, tenants can submit requests through the system and the landlord can track all of the details. Finally, landlords can use our system to prepare financial reports to provide to his or her accountant.
Throughout the entire process, we prompt both the landlord and tenant about things that they should be doing. For example, we proactively remind tenants a few days before rent is due. When a lease is nearing expiration, we remind the landlord that it’s time to start the process of finding tenants again (or renew the old lease). Users gain tremendous value from having a tool that keeps them on top of it all.
Who are the founders and what are their backgrounds?
The Company was founded by Ryan Coon and Laurence Jankeow, long-time friends who met while attending the University of Illinois. Despite both entering college to study entrepreneurship, Ryan and Laurence graduated with finance degrees and entered the corporate world. Ryan worked for nearly four years at an investment bank in Chicago focusing on M&A for financial services firms. Laurence started his career at a risk consulting firm and was most recently at an asset management firm. While we each learned a lot in roles at larger firms, they love encountering and working through new obstacles every day.
Where are you based?
Our office is in Chicago. More specifically, we are located at 1871, the awesome co-working space that opened in May.
What’s the startup scene/culture like where you’re based?
The startup culture in Chicago is awesome and it’s getting better every day. There City has a combination of three great things working in its favor: a large number of smart, talented people, a tireless work ethic and the community necessary for mentoring entrepreneurs. Great things are happening here.
How did you come up with the idea for Rentalutions?
Ryan: In the summer of 2011, my apartment lease was expiring so I turned to Craigslist to find a new place to rent. I found a condo that was listed for rent by someone who was moving out of Chicago to pursue his MBA. The condo owner had never before been a landlord and this caused a lot of problems. The condo owner required me to scan and email (or fax) the application and lease documents back and forth – a time-consuming process that took almost two weeks. When it was time to pay the security deposit and first month’s rent, I sent checks via overnight mail. Rent is currently the only expense I am not able to pay electronically. Throughout this entire process, I remember thinking to myself, “there has to be a better way to do this.”
Laurence: Around the same time that Ryan was becoming frustrated with the rental process, I was beginning to consider renting out the condo I purchased in 2008. When I bought my condo, I was single and didn’t need a lot of extra space. Fast forward three years and I was engaged and realized that the condo wasn’t nearly big enough (or have enough closet space) for both my future wife and me. I didn’t want to sell the condo because its value had fallen as a result of the financial crisis and I would receive significantly less than I paid for it. When looking at renting out the condo, I realized I had two options – hire a full-service property manager and pay more than 10% of the gross rent or do it myself. I quickly realized that renting the unit myself would save money, but that the complex rental rules would take a lot of time and effort to learn.
As longtime friends from college, we recognized an opportunity based on these experiences and dozens of similar stories from friends and family. We spent a lot of time researching the process and discussing the problems with potential customers. During these conversations, we realized just how complex the rental process can be and how many people are either unsure of what to do or are making potentially costly mistakes.
How did you come up with the name?
The name Rentalutions is a really just a description of what we are providing our customers: rental solutions.
What problem does Rentalutions solve?
We answer the question that all do-it-yourself landlords ultimately have – what do I do next? Our platform is designed to guide landlords through the process of renting their properties. We do this with prompts and reminders, but also provide the tools to actually complete the necessary steps.
What’s your secret sauce?
Our focus on guidance and education is what differentiates us from our competitors. Dozens of companies provide tools to landlords, and some do it very well. In order to use these tools, though, the landlord must first know exactly what he or she wants to accomplish. We are the only company that proactively helps them along the way.
Are you bootstrapped or funded?
We have bootstrapped so far, but we are working on a seed round that will close in the first quarter of 2013.
What is your goto market strategy?
We are working hard to establish ourselves as the go-to educational resource for first-time and novice landlords. We want these individuals to turn to us whenever they encounter a problem or have a question.
What’s one challenge you’ve overcome in the startup process?
As first time entrepreneurs, we encounter new challenges every day. One of the things we are constantly asking ourselves is if we are making the best use of our time. In a startup environment, the founders’ time is one of the most precious resources and it should be protected at all costs. At the end of every day, we want to be able to look back and say to ourselves, “we made significant progress and learned something new today.”
Who are some of your mentors and business role models?
There’s the old saying that it takes a village to raise a child. We feel that we have benefitted from the help of dozens of people throughout the Chicago tech and business community. People here are extremely willing to help entrepreneurs. There is a real feeling of a community that wants you to succeed.
One of the business leaders we constantly think about is Steve Jobs. Jobs’ singular focus of developing the absolute best customer experience is something we appreciate and strive to imitate in our business.
What’s next for Rentalutions?
We will continue focusing on improving the overall user experience by listening to their needs and providing them the solutions they want.