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Rent management platform surges during lockdown

Sydney apartment buildings
3 min read
COVID-19 has provided the impetus for many property management functions to go online. Photo: Shutterstock

Rent management platform surges during lockdown

Around 32 per cent of rental properties in Australia are self-managed and the number is set to rise as technological advances and economic realities push and pull investors from real estate managers.

Around 32 per cent of rental properties in Australia are self-managed and the number is set to rise as technological advances and economic realities push and pull investors from real estate managers.

The financial strains caused by COVID-19 have driven a surge in rental management tools, such as Instarent.

Traditional ongoing management fees typically take up 7-8 per cent of collected rent but can be as low as 5 per cent or as high as 15-25 per cent for short-term or student accommodation. Letting fees usually amount one or two weeks of standard rent, plus there can be marketing fees, inspection and lease renewal fees, repairs and maintenance costs, and tribunal appearance fees.

Queensland properties are the most likely to be professionally managed (82 per cent) while for Victoria and NSW it’s about 75 per cent, and it’s below 65 per cent in SA, WA, Tasmania and the Northern Territory.

Property management platform Instarent saw exponential growth during the lockdown, reporting a 400 per cent increase in users during March/April 2020.

Market leader PropertyMe experienced a similar surge over the pandemic, recently signing the millionth property to its books as landlords and tenants increasingly demand an online solution for property management.

Instarent connects landlords with tenants via a digital platform that replicates many of the functions a traditional property manager would provide such as online listings, tenancy agreements and getting a tradie for repairs. Clients pay around $240 per year through a monthly subscription fee to the app service.

More than 150 tech investors contributed to a seed funding round for property management platform Instarent, putting more than $313,000 into the company via equity crowdfunding platform Birchal. The NSW Government also backed the company during start-up phase with seed funding.

Instarent connects landlords with tenants via a digital platform that replicates many of the functions a traditional property manager would provide such as online listings, tenancy agreements and getting a tradie for repairs. 

Co-founder and CEO, AJ Chand, is hoping to take 20 per cent of the self-managed rental market worth around $5.5 billion by charging $10 a month for its premium service. 

“Self-management is hugely appealing to landlords who are fed up with real estate and property management agencies,” Mr Chand, said.

“So many of the landlords that come on board complain about real estate agencies’ fluctuating costs, lack of inspections and exorbitant charges for standard lease renewals.

“Landlords feel they are paying a lot and getting little in return and Instarent is changing that,” Mr Chand said.

Airbnb currently dominates the market niche when it comes to holiday and short-term rentals and they have also tried to make inroads for long term rentals (you can rent property for up to six months on the site now). 

“Instarent is looking to disrupt the rental property status quo,” Mr Chand said.

“There’s no doubt that the self-managed long-term residential market was lacking an app that provided everything landlords need to efficiently and cost effectively manage their investments,” Mr Chand said. 

Mr Chand described the platform as a ‘set-and-forget system’ that connects tenants directly with rental properties and landlords. It also helped organise inspections, take applications, screen and verify potential tenants, collect rent, handle maintenance orders and connect tenants directly with landlord-approved tradies.

The Instarent app was conceptualised and built in Australia in 2018 and is real estate compliant as well as data security and payment compliant. 

With social distancing requirements now in place, an app that can take on some of the in-person work is also a major selling point.

“People really don’t want strangers coming into their homes right now, and for good reason,” Mr Chand said.

“Now rental agreements, maintenance requests and all other rental paperwork can be submitted online and all your conversations can take place here.”

 

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