Brazilian online rental startup QuintoAndar.com has raised $7 million with the help of Latin American venture capital fund Kaszek Ventures and a number of angel investors.
Currently based in São Paulo, QuintoAndar has been called the Uber of renting by connecting tenants with home owners.
Its business model aims to make searching for, visiting and signing a rental contract easier and more secure by making it possible to sign a lease online.
QuintoAndar users who join up with DocYouSign can now rent a property without physically signing on the dotted line.
The electronic signature has the same legal weight as a paper contract and is filed securely by the certification company meaning the tenant and property owner can negotiate from different locations.
According to a report in the Rio Times, QuintoAndar’s differentiator is its ability to circumvent the need for a fiador, or guarantor.
“In Brazil most people renting an apartment need someone who owns property in the same city or an insurance company to underwrite their rental contract,” the report states.
QuintoAndar CEO Gabriel Braga told The Rio Times the company has a partnership with the insurer Cardif at BNP Paribas, which “pays the security bond and wipes out the need for a guarantor”.
"Renting a property has been an inefficient process for homeowners and renters in Brazil,” says Kaszek Ventures founding partner Nicolas Szekasy.
“QuintoAndar has arrived to solve the major frustrations of the market with innovation and technology.”
Founders CEO Gabriel Braga and CTO Andre Penha, who studied at Stanford University in California, launched the company as a result of their own experiences as renters in 2013.
“QuintoAndar banks 100 per cent of the surety bond for all tenants who rent a property managed by us in São Paulo and Campinas,” Braga confirms.
“The company pays all fees that the insurance charges and the owner is as insured throughout the lease.”
Braga explains the difference between the QuintoAndar offer and traditional insurance is that the startup pays the insurance premium - that is, the amount that the tenant would pay if the hire directly.
"We ended up with the drama of finding a guarantor, issuing a security-check and paying for insurance outright,” Braga says. “We wanted to revolutionise the real estate market in Brazil.”
Braga clarifies it is not necessary to pass the cost of insurance on to its clients.
"Because we have contracts with all those who have real estate, we have a much leaner and scalable operation based on the reinvention of each step of the process.
“We prefer to invest in things that generate tangible benefits to customers such as a single platform, professional photos and a reliable bond free service," he explains.
The company claims it has recorded a high of 30 per cent in the number of contracts signed each month.
Professional photos of all properties are taken and posted on the site giving viewers the chance to see all the details of the place. They can then schedule a visit via an online booking system.
“Instead of visiting thirty properties, they visit just three,” Braga tells The Rio Times. “So the user saves time and the broker raises profitability, since he makes fewer visits and has contacts with more engaged customers, who are more inclined close the contract.”
Properties advertised on QuintoAndar also appear on a number of other rental sites, such as VivaReal, Zap Imóveis and Imóvel Web, giving a potential viewing audience of up to 10 million people per month.
Interested tenants are given a single price for each property which includes the condominium fee, property taxes and the rent.
It is then the responsibility of QuintoAndar to pay the various fees to the apartment owner. Once the contract is signed, the owner pays one month’s rent to QuintoAndar and a monthly fee for managing the property from then on.
The site takes responsibility for dealing with requests and problems that may arise with the tenant, including the late payment of rent.
While QuintoAndar currently operates in São Paulo and Campinas, it aims to expand to other regions in Brazil.
“Our goal is to expand the role of the site to other regions, but we are doing it gradually so as not to lose quality,” Braga says.