The Real Deal New York

Can brokers really be bypassed?

A slew of new websites and apps are trying to cut agents out, but the online field is getting crowded

March 01, 2017
By E.B. Solomont

(Illustration by Phil Wrigglesworth)

Rental brokers may be warring with each other over exclusives, but they also face a common enemy: online listings that bypass them altogether.

Over the last decade, a string of web- and cloud-based startups have offered landlords a way to connect directly with tenants.

Today, there are a half dozen such sites and apps, including Rentlogic, which assigns grades to buildings, and Rental Geek, an app that lets users search for apartments and submit applications digitally for a flat fee of $25.

In a bid to corner the market, listings behemoth Zillow bought New York City-based Naked Apartments — which lists no-fee apartments —for $13 million in cash in 2016

Some agents have figured out a way to tap into those sites for their own gain.

Bond New York’s TRData LogoTINY Jamal Syed spends up to $1,000 a month advertising on Naked Apartments and Zumper.com. By his calculus, that marketing generates roughly 30 inquiries a month that yield three to five closed deals. “If you spend ad dollars, it’s a guaranteed return,” he said.

But even the web is getting crowded with new ways to find a rental.

Another site, RentHop, for example, gives each listing a score based on a host of factors, like how long an apartment’s been on the market and the number of photos. And Rent Jungle pulls listings from more than 12,000 property management sites and adds them to its searchable database.

Landlords are not standing by idly.

Some building owners who advertise directly to renters via Google “are buying the same keywords and fighting for the same space” as these startups, said Stephen Kliegerman, president of Halstead Property Development Marketing.

In response to these new rivals, companies like Nestio — a cloud-based leasing management system — are trying to give landlords a competitive edge by giving them demographic and other data to improve their leasing, management and advertising operations.

“Landlords are getting a lot smarter about how they want to use their data for to make better decisions,” said co-founder Caren Maio.

To date, Nestio has raised $11.9 million from investors and has clients including Two Trees Management and UDR, the Denver-based REIT that owns the Columbus Square rental complex on the Upper West Side and 95 Wall Street.

“With the development boom, the stakes [for landlords] have never been higher,” Miao said.

With that competition in mind, nascent brokerages are thinking beyond the leasing stage of the rental business, too.

Mdrn., which launched in 2013, is in the process of rolling out Stoop, an app for landlords that aggregates third-party services like Instacart grocery delivery; Cleanly, an on-demand laundry app; and Parcel, which collects and delivers packages.

Zach Ehrlich, the CEO of Mdrn., envisions his app as another amenity landlords can offer to tenants. “The future of brokerage is after the lease,” he said.