6 Property Portal Business Models That Flip The Industry Upside Down

May 18, 2023
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All property portals aren't built the same. We should know, we collected data on more than 900 of them earlier this year.

While we analyzed the similarities and differences between online marketplaces from Afghanistan to Zimbabwe in 2023, we used it as an opportunity to identify property portal business models that don't monetize the real estate industry quite like everyone else.

From coupon sales to profitless portals, here are the 6 best examples of portal business models that flip the industry upside down. Who knows, maybe there's a business opportunity in here somewhere!


Leju makes money by selling coupons

When Chinese portal Leju Holdings Limited listed on the Nasdaq in 2013, its prospectus outlined the company's intention to operate primarily as an e-commerce business—specifically by selling discount coupons for new property developments.

The idea is straightforward: make purchasing a new property cheaper for the buyer via coupons, while also facilitating viewings, transactions, and customer support.

The company had grown from a loss-making entity in 2011 (net loss $11.6 million) to a profitable business by the time it floated on the stock exchange in 2013 ($63.4 million).

Leju's discount coupons allow buyers to purchase specified properties from real estate developers at a discount greater than the price they paid for the coupon. Leju only recognizes such e-commerce revenues when the discount coupon has been redeemed to purchase a property.

Leju also offers advertising and listing services, and it owns various real estate and home furnishings websites—but these make up a significantly smaller proportion of Leju's revenues.

The question is, is this model working?

Leju's financial results say no: revenues from coupon sales dropped 32% YoY as the company recorded a net loss of $89.7 million for FY22.

The bigger picture shows that shares in the company have dropped from an all-time high of 174.5c in August 2014 to just 1.13c as of 17th April 2023.


PAP.fr has banned agents

PAP is a property portal just like any other, but agents are banned from getting involved. PAP gets its name from its model; Particulier à Particulier means 'Individual to Individual' in French.

Of course, that means there's an important skill set missing in the transaction, but that's where PAP gets interesting—its premium package includes real estate coaching so Average Joe can educate himself on seeing through a deal himself.

The regular package is a typical pay-to-list offer, but customers can choose to pay a flat fee of €790 to get coached through their sale without sacrificing a penny of the sale as a commission.

It's a decent saving—most agents in France charge between 4%-10%—and a popular model. PAP says it receives 3m visitors to its portal every month, and its zero-commission offering will certainly be a part of that.

It's not an easy existence though. French agents hate PAP and the feud dates back to 1992.

Indeed, the French Real Estate Association (FNAIM) sued PAP for defamation of the entire real estate profession in 2020, when it alleged that PAP was illegally acting as an agent itself. PAP won, by the way.

Interestingly, PAP broke new ground earlier this year when it opened its first physical offices in February (in Lille and Toulouse) to improve its brand presence and give prospects an avenue by which to explore local buying and selling opportunities.


Realtor.ca doesn't make money (technically)

Realtor.ca is Canada's most popular real estate website with over 50% market share and 564 million visits in 2022. The site and app are updated daily with up-to-date listing information about commercial, residential, and rental properties.

But the portal doesn't generate revenue.

Realtor.ca is owned by the Canadian Real Estate Association (CREA) consisting of 160,000 members including real estate brokers, agents and salespeople operating out of over 60 real estate boards and associations throughout Canada.

The platform is a major lead generator for estate agents in Canada, who are happy to pay a membership fee to keep CREA, and by extension Realtor.ca, live. Membership fees for CREA hit $51 million in 2022, so there is clearly demand for the association.

It all might be set to change soon as CREA recently announced it is in talks to spin off realtor.ca to become a for-profit model in the face of competition coming from south of the border.

Interestingly, CREA's 2022 annual report outlined how Realtor.ca is shifting from a traditional search to a research platform in 2023, so it will be interesting to watch the portal's progression in the next 12-18 months.


Australian and Swedish portals charge vendors to market their property

Names like Hemnet and realestate.com.au are regular features on Online Marketplace, but we rarely mention that their native markets charge the vendor, and not the agent, to market their property.

Marketing a property can cost the vendor up to $8,000 in Melbourne and $10,000 in Sydney, while the agent still pockets a commission of 1% to 3% for negotiating the deal.

It's a controversial topic for some. Real estate portals, particularly in Australia, are often criticized for overcharging members of the public to sell their property; the typical homeowner doesn't sell a house very often, so it is difficult for a vendor to know whether they are getting value for money.

Meanwhile, agents purchase a listing package from the portal relative to how visible they want their stock to be, which means Australian and Swedish portals are in a privileged position of monetizing both the agent and the seller!


Swedish, Danish and Dutch portals charge users to speak to landlords

Not content with monetizing the seller, Sweden shares a trait with Denmark that involves charging would-be renters to speak to landlords.

In Sweden, Bostadhub offers new users a 3-day trial to message landlords, after which they pay a monthly subscription to have access to landlords' contact details.

Meanwhile, Danish rental platforms Boligportal and Lejebolig have taken this model one step further by charging would-be renters to contact landlords in any capacity.

On Lejebolig, landlords can pay a flat fee to give the listing premium placement for seven days as a lead generation tool.

Kudos to Boligportal, though. Landlords can pay Boligportal to allow applications from unsubscribed prospects. Talk about squeezing the lemon.

In The Netherlands, HousingAnywhere charges home-hunters a subscription fee to contact landlords, while tenants in international markets including Germany, Austria, and Belgium are charged 35% of their first month's rent as a service fee.


Estonian portals charge based on the property's value (and how long you list for)

In Estonia, City24 and KV have three revenue-generating segments to their businesses, including traditional subscription and advertising models.

But it's their fees to private and sellers and landlords that are most interesting.

For individuals listing their properties, City24 and KV charge on a listing-by-listing basis, with the listing cost calculated according to the property's value (according to the seller), how long it is listed for, and how much prominence they want to give to their listing.

On KV, listers pay €10 per day to list. Meanwhile, they can buy up to five "stars" for €1.49 each to give the property more visibility, with five-star properties appearing at the top of search results.

May 18, 2023
Harvey is an experienced property journalist and copywriter. He has written about the property industry since 2015, starting at The Property Franchise Group in the UK, before moving to Spain to work for Spotahome. He has blogged for the private rented sector, ghostwritten for UK property experts and written case studies for franchise owners around the UK. Harvey joined Online Marketplaces as a News Editor in 2022.

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