Property Connect Part 2: Put Speed and Transparency into Leasing
In Part 2 of our chat with Darren Patterson, CEO of Property Connect, we talk about putting speed and transparency into leasing.
Follow the link below to check out Part 1 of this series.
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Leesa: Welcome to another edition of Rent Roll Insights, I’m Leesa Sinn and joining me again today is Darren Patterson, CEO and Executive Director of Property Connect, welcome back.
Leesa: Thank you. Look Darren today I’d like to talk a little bit more around LiveOffer. We spoke briefly about that in our first video. So, can you elaborate a little bit around what LiveOffer does and what it is?
Darren: Yes sure. So, it’s effectively a little bit like eBay, is the easiest way to think about it so, whether it’s rentals or sales it’s about providing transparency around that process. I think today in the Australian market when people either go to buy or rent a property they turn up for an inspection, the agents busy it’s a Saturday they usually don’t work on a Monday you might hear back by about Wednesday. This provides a real-time insight into what people actually think the value of that property is, whether it’s for rent or for sale.
So, we record that, users register either as a renter or a purchaser and they get to submit an offer. Now that offer is not just about the price and I think this is where we get is a rental bidding, and there’s a lot of sort of noise about that in this market at the moment and state by state it’s different, the Victorian government says one thing Queensland says another.
Leesa: Very confusing.
Darren: Look I mean the bottom line is when I’ve been talking directly to let’s say renters that are applying, and I start fielding calls because the property managers disappear. They’re like I want this property I want it now yes and I said well I can’t award it, it’s down to the landlord. So what it’s really about is creating that three sided marketplace between the property manager, the landlord and the applicant. Now the applicant can make their bid, they can control their move-in day, their weekly rental offer and also the term of the tenancy. What we also do is profile that tenant and applicant. We ask them to pre-vet themselves so, we do a credit check and a tenancy check against databases. So, we actually use a national tenancy database at the moment ultimately we’ll try and build our own. So when a landlord or property manager looks at that application they’ll see a pre verified or not verified. We factored that into how we rank the offer and ultimately the way we’ve built the system is very much for the US, but also for the Australian regulatory environment you have to go through systematically from the highest offer or the best offer and determine whether you want to accept that tenant and there could be a plethora of reasons why you may not. Their profile might not be verified, if it is verified they may have been blacklisted or something like that or you know the other conundrum is that the landlord just doesn’t like the look at them.
Now that in itself solves a pain point for property managers and because ultimately there are legislation around discrimination etcetera and ultimately what we do by allowing the landlord to be in the process is make that decision. So, again the property managers not in a position of conflict and that’s something that we are working with groups around and with legislative bodies eventually.
I think the other point to note is that when a property manager is trying to let a property on behalf of the landlord and the landlord’s unrealistic in their expectations the system allows the property manager to go back with clear data and say well this is what you expect the weekly rent to be, this is what the markets currently saying. So, it’s up to you whether you want to take the economic loss for the next week, three months, continue to advertise or if you take a $5.00 or $10.00 less offer, then you’re actually better off.
Leesa: So, it goes back the other way, so it’s advertised at $1,000.00 a week and realistically it’s really only worth $800.00 then that data will come through from the offers that are coming in.
Darren: Yes, and again I’ve seen the opposite where something is in high demand and it’s actually gone up by you know $65.00 in a four day period because there was 18 bids. I’ve seen the opposite where they thought of just underbid. So, the tenancy advocates and groups that say it’s unfair that’s totally not correct and I think in a world we’re moving to an environment where there’s going to be more renters than there are actual property owners it’s a great system and it provides transparency and the legislation needs to catch up. It’s not illegal I had that verified by lawyers across multiple states.
Darren: So agents looking to roll it out and use the platform and we’re working with some of the big groups. There’s no concern there. Really it is about helping principals in property management groups take cost out as it’s time and money dealing with these applications and then there’s a whole piece around you know, once you’ve decided that’s the tenant you want we can take a holding deposit, we can even have them sign a lease and if you want you take the entire first month’s rent and bond as well.
We’ve stopped short of at the moment because most public managers still want to physically see the tenant come in and collect the keys, but you know talk about disruption again in New York that’s all completely automated. So, people use key boxes and such to go and do inspections.
I think it’s another point as well the inspection process today is all driven by the portal. Now some agents will tell me that they still turn up on a Wednesday and a Saturday they’ve got to do it on behalf of the landlord even though nobody goes right, what’s the point.
Leesa: It’s a bit of a waste of times if no one is there.
Darren: Yes, so my view is you using LiveOffer if you put that into the registration process and you ask the tenant it’s a pre verifying, pre qualifying, make a bid then book the inspection you know you’re actually going out from qualified sales lead effectively and we’re working with the large portals to maybe try and get LiveOffer as a button somewhere in there and their processes.
Leesa: Yes, and I think that you made a really good point there around the transparency and I picked up there as well around the speed because you’ve got that very clear between the tenant the landlord and the agency. So it’s a transparent process for everybody, everyone can see what’s happening and you know you’d find that things would get processed a lot quicker so properties weren’t sitting on the market for as long and applications wouldn’t then take as long to process.
Darren: Exactly because we’ve got the links to the database, that’s already done, and what we actually do is we prepare a PDF which summarises all the information that the applicants put in so that can actually be viewed obviously certain bits you need to take out of that need to show the landlord, but the property manager has the full details, you can then physically call the HR manager and check the income etcetera are they able to pay the rent. So it’s it really is about streamlining that process. We also have another feature called “Secure it now”. So it’s a bit like eBay buy it now. If an applicant wants to match exactly the landlord’s preferred terms they can and if they’ve been pre-verified then the property manager can very simply forward it to the landlord, the landlord would look at it and they could be accepted there and then.
Leesa: So quick.
Leesa: Excellent. And we talk a lot about that with getting a really tight, we call it a leasing machine, making sure that is moving really-really quickly and it sounds like the LiveOffer actually marries up with that.
Darren: Yes we’re doing some integration with other systems that agencies generally use. I think the ones that we want to work with are the ones that are using some of the cloud-based systems are very open. I see too many fragmented old– I won’t use the word platforms and that just slows things down and actually I think a good property management company can probably run on two or three systems these days. I’d like to actually go and buy two or three of them put them together.
Leesa: Look thank you thank you so much again Darren for coming along, some fantastic insights around LiveOffer. I will be sure to put the link to Property Connects website and some more information around LiveOffer as well. So, thank you once again for joining us, and thank you again for joining us for another episode of Rent Roll Insights, we’ll see you again soon.