The CEO of Rent.com.au, Greg Bader, says portals need to become more customer focused, industry aligned and willing to adopt technology if they want to help Australians simplify the home rental experience.
Bader says he was shocked by the results of the recent Rent.com.au Rental Affordability Survey, which concluded that the majority of Australian tenants suffer from 'rental stress'; a situation that arises when renters pay more than a third of their weekly income in rent.
Rent.com.au conducted its Rental Affordability survey this April, interviewing 2000 renters across Australia. Results revealed that 53 percent of tenants reported spending one-third to a half of their weekly income on rent. When more than a third of a person's income goes towards their rent, rental stress occurs.
"It is no surprise that Sydney/Melbourne are the toughest markets for renters; the percentage of people paying over 30 percent of their disposable income was a bit of a shock and maybe something that flies under the radar a little with all the talk around affordability from a buying perspective," Bader admits. "Many initiatives are being discussed on how to address this (buy-side), and certainly some of these ideas (for example, supply) have a positive flow-on effect for renters."
Bader says we are currently "stuck in the dark ages," with 30 percent of the population renting, but the overall experience of renting can be less painful if we keep some key points in mind.
Simplify the 'renter experience'
"Just over 30 percent of people rent and this is a stat that's climbing each year," Bader says. He suggests losing the stigma attached to renting – acknowledging that it is here to stay – and focusing on making the rental experience simpler for the customer.
"Feedback from our customers tells us that they want the entire experience to be simpler, less confrontational, more consistent and predictable. These are the points we like to think that Rent.com.au is addressing first and something that I think is unique to us, not only as a portal but specifically as a portal that focuses on the rental market."
In late 2016 Rent.com.au launched its renter resume, a document that streamlines the enquiry and application process when applying for a property. Bader says this feature has been immensely popular with renters.
"We only launched the product late last year and had an average of over 500 new resumes a day since then," Bader notes. "Its popularity proves that the expectations of the customer (renter) are starting to exceed what the industry can deliver. If I look at our industry - over 8,000 different property groups using 100s of different CRM tools - you can see how we will struggle to present a simple/common face for the renter – this is why we work well with agents. We do not see ourselves as simply an extra “middleman,” we see ourselves as a solution that presents a unified industry face to our customer (the renter) but also offers time/cost savings back to the agency."
Work with the industry to achieve results
Bader says working together with renters, agents and landlords is the best way to achieve results that ease the burden of renting.
"Our platforms are constantly in development, cloud based and easily scalable. We regularly hold sessions with both renters, landlords and agents to understand challenges and areas where we can help; our recent release of NBN availability on all listings is a great example. Renters want the information, but it is hard for agents to gather this accurately and add it to their listing – some do, but many don’t. To improve the consistency of the information and to lighten the load on the agents we worked with NBN on a solution, and now it’s on there for all properties."
“A great example of this solution is our new Smart Plan, an industry-first, risk-free advertising model that is already delivering value to real estate agents’ bottom line. A further bonus is that, on average, Smart Plan listings are on market for 15% less time and receive 150% more views.”
Drive technology to be more 'customer focused'
Working with renters instead of against them is the way forward, Bader admits. He says that those who adopt this model of thinking will experience success in their business model and also help ease the burden attached to renting.
"I think that the area we are going to be challenged in is around our attitude and customer service," he says. "This is truly in the dark ages. Again, with 30 per cent of our population renting (and the fastest growing segment being professional, practical renters), it will not be long before that group will not tolerate being treated as somehow ‘secondary.' This is what drives people to seek out a new solution that removes the bits they do not like."
Bader says that in the foreseeable future, renters will have more options due to competition within the industry.
"Many other technical disruptions are coming, and we will have US/EU based-companies setting up in Australia. We also have our highest-ever rate of development of local real estate solutions hitting the market (everything from inspections, services, leases, payment – all the bits needed). Some will succeed, many will fail, but we cannot assume our current market (duopoly in portals, fragmented agency layer) offers any level of protection against change – I would argue the opposite, this is exactly what will be the driver of change."