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In the United States, more than 36% of millennials live in rentals, and as more employees operate from home - reaching more than 44% of all employees by 2020 - rental demand is rapidly growing. Particularly in smaller cities, properties have been leased within days and asking rent prices have risen by 13.5%. As a result, rental platforms have become increasingly successful in recent years with impressive profits.
However, making a rental search application that can compete in an ever-growing and competitive market can be challenging. It can also be confusing on how to build a rental marketplace.
Therefore, in this article, we will look at how a rental marketplace can save money for landlords and property managers, the latest rental platform market trends, rental marketplace business models, key features of a rental marketplace, a step-by-step guide to building a real estate rental platform, and some successful rental marketplace examples.
How A Rental Marketplace Can Optimize Expenses
Vacancies are one of the most significant sources of income loss for landlords. According to the National Apartment Association, landlords have a 49% turnover rate. This forces them to fill their vacant properties as quickly as possible with qualified tenants in order to reduce their losses but finding reliable and trustworthy tenants is difficult.
Landlords and property managers must review credit ratings, criminal records, eviction histories, and references to find the ideal tenants. If a bad tenant is selected incorrectly, long-term costs can incur due to possible property damage, late rent payments, evictions, and, eventually, vacancies.
These problems, however, can be mitigated by using a rental marketplace.
Landlords can save time and money by using online rental platforms to fill their vacant properties. Rather than investing large amounts of money in advertisements, rental marketplaces can maximize visibility to tens of thousands of people who are specifically looking for new homes on the platform. Landlords may also stop paying a real estate agent as they would be able to list their property on their own.
Many popular rental marketplaces also provide tenant screening services that help to expedite the leasing process. Interested parties can apply electronically, and landlords can conduct background and credit checks using the same platform. Leases can also be signed digitally.
Rent collection and late fee calculations are other useful features of rental marketplaces. According to the March 2021 Real Estate Index Report, rent arrears have been rising while on-time payments have been declining. By having an online payments portal where tenants can pay their rents directly and immediately, revenue losses can be mitigated.
Finally, an automated system for accounting, such as billing and invoicing, can help to reduce human error and feedback. Costs can be reduced by 70% as leasing platforms can handle a majority of the work.
Market Trends For Rental Platforms
Rental platforms are becoming increasingly popular as millennials become the newest generation of home renters. Modern software has been rapidly evolving to meet demands as they seek easier and more convenient solutions. One of the most visible resulting trends that have emerged is virtual tours.
According to Zillow’s study, homes with virtual tours were saved 32% more than those without. They were also viewed 29% higher. Another study also found that more than 80% of millennials look for 3D tours while searching for a new home, and conventional virtual tours grew by 147% while enhanced virtual tours increased by 1147%.
According to these reports, the market for virtual tours is at an all-time high, and properties that have them are more likely to be rented out than those that do not.
Virtual reality (VR) and augmented reality (AR) are also becoming increasingly popular, enabling properties to be available for tours and inspections 24 hours a day, seven days a week. Landlords can use AR to show unfinished properties, and interested tenants can decorate the space however they want. As these features are integrated into more rental solutions, more consumers will be able to access this information from anywhere, allowing for mobile accessibility and convenience.
In addition, digital assistants, such as voice bots and chatbots, are being commonly used to provide users with instant responses and answers to questions and inquiries. Not only do users get an instant response, but these interactive resources often save landlords and property managers time, allowing them to concentrate on other important tasks. Smart buildings and technology also often relieve security issues and for landlords to be physically present at a property to bring interested tenants inside for scheduled tours.
Digital tools, such as rental marketplaces, are becoming more popular than ever before as the new generation uses and desires more accessible solutions. To meet this rising demand, businesses all over the world are scrambling to create a rental marketplace to capitalize on the market.
Business Models For Rental Marketplaces
Landlords and property managers can pay a one-time or recurring fee to list their property. If your platform offers free listings, you can instead charge a fee for extra listing benefits, such as the ability to upload more images, build virtual tours, or integrate with social media.
For an additional cost, landlords and property managers may promote their listing so that it appears as the first result of a search. Rental agents and brokers may also advertise their services to generate leads.
Advertisement space can be paid for by third parties, but this is a monetization model that should be used with caution. Ads should be held to a minimum, and should only be used once your platform has a loyal audience.
Users can pay a fee to gain access to special features. These features can include the ability to turn off ads, receive custom reports, and create 3D homes.
Key Features Of A Real Estate Rental Platform
Below you will find a list of rental platform features that modern businesses add to their software functionality.
It is important for rental platforms to implement integrated databases that can hold thousands of listings. The Multiple Listing Service (MLS) is the most widely used source for listing data, and by using third-party apps, this data can be optimized and configured. There should also be the option to accept user contributions, which can be done by filling out a form with details about the property, such as the address, photos, descriptions, and price.
Advanced Search Capabilities
The more detailed the search results, the better the user experience. Amenities, availability, car parking spots, location, number of rooms, price range, property type, square footage, and year of construction should be included in all search functions. It is strongly advised to conduct A/B research in order to assess the order of filters shown to users based on search patterns.
Furthermore, users should be able to save their searches and properties of interest, as this would increase retention.
Each listing should include a map view that provides specific details about the property’s surroundings, such as local transportation, schools, shops, vacation spots, and other points of interest. This can be made possible by using map APIs, and by including a GPS, users can instantly calculate travel times between the specified property and important destinations.
Your platform should also include demographics, such as crime rates and housing data, by using open databases.
Users should not be required to register, as this can push them away. Instead, it should be requested only when a consumer wishes to obtain additional information. The registration page should at the very least request a name, email address, and password. It is highly recommended to have a social network login, such as allowing users to sign up and log in using their Google, Facebook, or Twitter accounts. This would not only be convenient, but it would also foster trust with the user.
A robust real-time messaging system would improve platform engagement and use. Tenants, landlords, and agencies should be able to text and send attached to each other. It is strongly advised that users should be able to also communicate with one another through voice and video calls. Read about our recent case we have developed a communication application for tenants and landlords.
Similar listings should be recommended based on the user’s search history. Not only would this benefit consumers, but it will also benefit the rental platform. After all, when users have a positive experience, they are more likely to return.
This information should be accessible through the main menu or a similar listing tab.
It is important to strike a careful balance between text and images. Long paragraphs and excessive text should be avoided, and attractive images should be used to keep a user’s focus. House values and calculators are examples of information that could be achieved visually.
Furthermore, it is important that the method of adding manual entries be as easy as possible. If landlords or property managers believe that making a listing is too complex or time-consuming, they are unlikely to proceed.
Renters can benefit greatly from a personal profile. They should be able to create a portfolio based on their needs and specifications in order to attract landlords and property managers. Renters can also use their profiles to locate roommates.
Push notifications can be used to remind users of important updates, such as price changes or new listings. However, these notifications should be customized and not used in an abusive manner. They should be important to the user’s interests, as users are more likely to uninstall an app if they are bombarded with irrelevant alerts. By sending out notifications that bring value, it can improve user investment and customer loyalty.
Availability And Booking Management
By enabling landlords and property managers to control when their properties are available for showings or rent, users would be able to search for listings based on availability. After all, consumers on rental marketplaces often have precise deadlines and would tend to search for properties that are available when they need it.
A booking management system would also allow landlords to manage their time by using an automated calendar.
Ratings can foster a sense of trust among users, especially those with reservations about certain listings and neighbourhoods. Allowing previous tenants to leave reviews for landlords and neighbourhoods allows the rental platform to be more dependable and transparent about its information.
Virtual tours can provide a more comprehensive understanding and layout of a property than text explanations and images can. Users should be able to view homes whenever and wherever they choose, allowing them to take their time and thoroughly explore a home without feeling rushed.
International users who are unable to visit the property in-person can also benefit from 3D tours.
Similar to virtual tours, video tours are real-time tours in which a landlord or property manager walks around the home to provide a more personal experience. This allows for special accommodations and immediate answers to questions or inquiries that a virtual tour cannot provide.
A Step-By-Step Guide To Building A Rental Platform
Select A Solution Type
When it comes to rental marketplace software, there are two options: ready-made or custom development. Both forms have advantages and disadvantages, so it is important to consider which one best meets your needs.
A ready-made solution is ideal for those who want to launch their platform quickly and at a low cost. It is also perfect for those who want a fast representation of their product idea, as you can easily build a small and simple marketplace by using free open-source scripts.
This solution, however, is not appropriate for platforms that need full customization and that plan to expand in the future. For scalability, it is better to build a customized solution that can manage large amounts of data and can be modified with new functionalities.
While this type of solution is more time-consuming and expensive than a ready-made product, it is suitable for those who want to develop a dynamic and unique marketplace based on your specific demands and specifications. It is also ideal for those who want to build a user-friendly solution with flexible marketplace functionality that can be added or improved over time.
Conduct An Analysis
Perform a thorough examination of your business concept in order to comprehend the requirements that your product would need. It is critical to understand which features are considered essential and which are optional, as this will define which features the platform will start with. After completing this discovery phase of a software project, you will have a greater understanding of your core objectives, audience, scope, and challenges.
Choose The Technology Stack
Choosing the right tech stack for rental marketplace software solution is critical because it can have a significant impact on your budget, product scalability, and development time. It is strongly advised that you choose scalable technologies because you will most likely add new functionality down the road and would prefer to prevent scaling issues. You would also want to choose reliable and ready technology that can manage high loads of data and users, as rental marketplaces necessitate massive databases and often have thousands of users online at the same time.
Some recommended technologies are:
- Application Framework - Ruby on Rails
- Automation Framework - RSpec, Capybara
- Cloud Data Storage - Amazon S3
- Data Management - Real, CoreData
- Developmental Language (Android) - Java, Kotlin
- Developmental Language (iOS) - Swift, Objective C
- Hosting - Amazon Web Services
- SQL Data Storage - PostgreSQL
- Web Application Server - Puma
- Web Server - Nginx
Create A Minimum Viable Product (MVP)
It is strongly recommended that you create an MVP before developing a fully functional solution, as the MVP will allow you to save time and money. It will also allow you to put your business concept to the test and get feedback from investors and early adopters. As a result, when developing an MVP, you should focus on basic functionality and avoid overburdening your platform with non-core functions.
Over time, you can then expand your solution by incorporating new features and add-ons.
Examples Of Successful Rental Marketplaces
This popular rental search app offers millions of listings with professional images and videos. It provides a local guide that tells users about particular neighbours, including demographics, market trends, schools, and such on. Furthermore, with a trustworthy rating system in place, Apartments.com is a highly dependable platform that provides renters with reliable information.
Notable features include an advanced search engine, 3D tours, an online rental application, and interactive maps.
Developed by our Softermii team, RadPad is an end-to-end rental marketplace app that connects landlords and tenants. Renters can use a sophisticated search engine and map feature to find new homes. They can also find roommates, pay their rent, make maintenance requests, and even get insurance coverage - all from a single app.
A few notable features include a location-based search engine, social payments, interactive maps, and the ability to apply for rentals via the app.
Operated by the National Association of Realtors, Realtor.com is one of the most trusted rental resources. It has a variety of filters, and each listing provides details about its neighbourhood, such as price comparisons with nearby homes. Its map is also operated by Yelp, allowing users to see nearby restaurants, grocery stores, and other businesses.
Some notable features include 3D tours, crime maps, the ability to email and call from the app, suggested listings, and map drawing capabilities.
Trulia, which is owned by Zillow, is a prominent real estate platform that provides renters with useful and informative guides. One of its distinguishing features is its joint enterprise with CrimeReports.com and SpotCrime.com, which allows it to include neighbourhood-specific crime and safety statistics. It also includes a feature that assists the LGBTQ+ community by offering information about local discriminatory housing laws. As a result, Trulia offers a safe and dependable platform for concerned renters.
A few notable features include search results that can be viewed as a list, grip, or map, as well as user-friendly navigation, instant alerts, and neighbourhood facts and statistics.
With over 110 million listings in the United States, Zillow is one of the most popular solutions in the rental real estate industry. It attracts a large number of consumers and regularly receives high user traffic due to its large inventory, data, and services. It also provides programs that make it simple for landlords to advertise their properties and interact with their tenants.
Some notable features are up-to-date listings, robust filters, push notifications, built-in tenant screening tools, and personalized recommendations.
Softermii has been developing real estate software for over six years, including commercial property management. Our committed team of experts understands the dynamics and difficulties associated with these products, which allows us to provide a wide range of developmental services.
RadPad, our most popular rental real estate software, has gained widespread acclaim and has been called one of the Top 10 Best New Apps for the past two years in a row. It has a strong backend that supports a large property database, advanced search and filter, an interactive map, and real-time chat. We were able to build a rental search app like RadPad and turn it into the powerful end-to-end application that it is today by doing a thorough user experience analysis and usability testing.
With our custom-built engine, Apartmii, we can incorporate it into any real estate solution, enabling developmental steps to be accelerated or even skipped. It makes use of artificial intelligence (AI) to learn about user behaviour, virtual reality for 3D tours, augmented reality to highlight key features, a basic user interface for ease of use, a live video tour for realistic experiences, and automated credit scores for rental applicants. Thanks to Apartmii, we can develop a rental platform more easily and quickly than ever before.
Softermii is committed to creating housing rental app developments that blend well with your business principles and demands by making products that are driven by IoT, AI, AR, and VR.
As the demand for rentals increases, so does the popularity and income of rental platforms. Millions of tenants, landlords, and property managers have flocked to these marketplaces as these solutions have made the leasing process faster and more convenient than ever before. In 2020 alone, Zillow’s revenue has increased by 22% and Trulia received 23 million unique visitors.
However, building a rental platform is not as easy as it seems.
You must decide which business model to use in order to maximize monetization while also incorporating key rental marketplace features that improve user experience and retention. An extensive database, real-time messaging, booking management, virtual tours, and a rating system are among the core features, and once determined, building a rental property search app can be done in four simple steps: selecting the solution type, conducting an analysis, choosing the technology stack, and developing an MVP.
Softermii will collaborate with you on every stage of your rental platform development. We will ensure that you are prepared to join and remain in the market with a competitive solution. Contact us today and one of our experts will be happy to expand on the real estate software development services process and the cost to build a rental marketplace.
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