New Zealand’s rental market is starting to prepare for its newest guest, a polarising app expanding from America. 🤔
Rentberry is a self-proclaimed ‘price negotiation platform’ which offers a closed loop solution for landlords where ‘everything’ can be done in one place.
There is, however, one key point which is set to throw a curveball to those invested in the rental market in New Zealand.
Fundamentally, Rentberry is an auction site, where prospective tenants are pitted against each other in a bidding war to secure their desired rental property.
In a steaming hot rental market, could this be a solution for tenants struggling to find a property or is this simply opening the gates to even more price hikes and a less stable market?
When looking at Rentberry, there is only one thing that stands out for most people.
That is of course that the app is essentially an auction site for tenants to bid against each other.
For many, this is a great source of controversy, with pictures painted of auctions climbing well above the market rent, and desperate tenants paying over the odds purely to secure themselves a property.
In silicon valley, where RentBerry was founded... the thought of fighting for rental properties is causing quite a stir..
Kayla Healey from Renters United said in an interview with Radio New Zealand, “If you were a renter applying for properties and there was a landlord who was using this service and one who wasn’t, you would naturally go to the one who wasn’t.”
This then already jeopardises the success of the app. If tenants choose to overlook properties on a bidding app and choose more conventional routes of finding a property through mainstream channels, as a landlord, you are losing a large portion of your target audience.
In turn, this means that there are fewer people bidding resulting in a price not as high as you had hoped for, and potentially tenants who will not suit your property at all.
Another concern for tenants as would-be consumers of this app is the lack of verification. ☠️
Rentberry states in its terms of service that it does not verify the accounts and information of people who sign up to use its services.
The immediate question then is what is to prevent some landlords from creating falsified accounts using incorrect information to inflate the price paid during the auction?
The answer is nothing.
With the app’s co-founder Alex Lubinsky saying “it is a way for the landlord to get the true maximum rental for their property” it encourages landlords to seek out prices that are above the market rent for this particular type of property and could once again turn tenants away from choosing to rent through the app.
By losing the interest of tenants who are concerned that they will be paying a premium for their rental property, landlords are potentially missing out on the best tenants who could afford to pay above market rent should this have been appraised fairly and not done through auction.
Applications are essential in many aspects of managing property.
Trust Accounting software and software for marketing properties are all key weapons in the armoury of the property manager.
Property management is certainly changing and needless to say, technology has a very important part to play in that.
Caption: Another Twitter reaction
At Tommy’s we strongly advocate technology, with property virtual tours being used to market properties and a new app being used for property maintenance.
Property, however has always been about people. 🤝
Removing the personal touch from property management is a dangerous game to play.
On the most basic level, meeting and greeting would be tenants allows you a wealth of knowledge when it comes to selecting a tenant.
Knowledge is power, needless to say.
By removing the face to face, real world contact with a tenant it can be difficult to build up trust, both as the tenant and the landlord.
As a landlord, the bare minimum you need is to be able to trust the tenant to pay rent on time, report maintenance issues quickly and be courteous and respectful during their tenure of your property.
As a tenant, they want to know that they are secure in their lease, that maintenance will be done promptly and they can relax and be comfortable in your home.
Bidding on property can result in a tenant feeling like ‘just a number.’
In turn, this can result in poorly managed rental payments, less inclination to look after and maintain the property and slow reports of maintenance issues.
While these are all offences that would stand up in a tribunal, as a landlord your time is more valuable than anything else, and the tribunal will quickly absorb that. It is simply an unnecessary hassle.
Making sure that you have the opportunity to meet the tenant and you make all necessary efforts to begin the relationship with a personal touch, will inevitably result in tenants who will almost always reciprocate.
This will lead to a smooth running on your property, with maintenance being reported on time and a clean, tidy, well looked after home.
Tenants love security. 🏰
With the market fluctuating so much in recent times there is a lot to be said for finding a good and fair landlord.
Tenants will be more inclined to stay on in your property if they have a good working relationship with their landlord...
With little to no vacancy periods and a reliable and trustworthy tenant, landlords can sit back and relax knowing that the running of their property will be smooth sailing.
The app then it would be fair to say removes this level of human interaction and instead, your tenant becomes just another notification on your smartphone.
For private landlords however, the app does offer some positives. 👏
Allowing a closed loop solution where background checks, credit checks and maintenance can all be logged in the same place which will surely result in better landlord behaviour across the board.
With a more streamlined process of communication, tenants might expect a landlord to be more involved and much more efficient in maintenance work and general issues that occur when renting property.
It offers landlords who choose not to use a property manager the ability to background and credit check each tenant who applies to find the best fit for their property and most importantly, it gives landlords and investors an opportunity to maximise yields.
This app will not replace property managers and is certainly not a work around the new legislation that we have seen in the last few years. It does, however, offer landlords a strong tool for organisation.
On the whole then, Rentberry offers landlords an excellent opportunity.
Whether or not this will take off in New Zealand is yet to be seen, but what is certain is that tenants are nervous about it and the emphasis is put back on the landlord to maintain a professional and upfront relationship with any tenant that they deal with.
For tenants, they must be prepared to face that fact that the rental market does not stay stable and prices can fluctuate throughout the year.
If you would like to know what your rental property is worth, or how Rentberry can affect you as a landlord or property investor, we would encourage you to give Jack an obligation free call anytime on 04 979 6363.