Ten Questions With Jonah Hanig, Founder of Rove

Short-term rentals specialists seem to be about the only real estate marketplace companies that didn't experience a big downturn in 2022.

If there is a demand for curated rental getaways then the logic goes that there will also be a strong market for the buy-to-rent housing stock that caters to that demand. Purchasing a buy-to-rent property isn't always so straightforward though.

Founded in 2021, Rove is a startup that serves both sides of the equation. It is both a marketplace for high-end short-term rentals and a marketplace for investors to compare and buy rental stock featuring some really neat listing data.

We spoke to Rove's founder Jonah Hanig to find out more about the model...

What is the problem that Rove solves?

Jonah Hanig, Founder of Rove

Rove’s marketplace is an online platform for investors to buy and sell short-term rental properties. There’s currently no platform to view for-sale residential properties side-by-side based on their historical and/or projected income as a short-term rental investment. Rove is solving this and building compliance data to help prospective home buyers understand if a for-sale property is eligible to be a short-term rental, or is in a city, state, or HOA that may restrict this type of use.

The other problems we're tackling with Rove Travel’s property management business are inconsistent guest experiences and underperforming property managers.

We’ve built a boutique-hotel brand of nightly rental properties that meet an internal brand score, are reviewed by professional interior designers, and are consistently equipped for a luxury and remote-work-friendly home-rental experience. We are building a much better home-owner experience than other managers with the ability for owners to use their own vacation homes part of the year and access tools to better manage and forecast their property’s performance.

What is Rove’s USP?

Rove’s marketplace enables buyers to compare prospective for-sale homes by their historical income and expenses if previously a short-term rental property, see projected profit and loss on all residential listings, and view verified nightly rental permit compliance data.

We've built a platform which is a listing place for buyers and sellers to qualify and compare for-sale properties within a market to determine the best short-term rental investment opportunity.

What is Rove’s biggest challenge?

We’re always looking for new homeowners interested in either purchasing residential investment properties or who already own a home and may be interested in better monetizing it under the Rove brand.

What was the thinking behind building a sales marketplace?

Kyle (CTO) and I personally experienced the underwriting and compliance challenges of purchasing investment properties when we purchased our respective first homes with a return on investment in mind.

Additionally, Rove has strong demand from homeowners we have partnered with who are interested in purchasing additional investment properties. We have excellent internal data from the properties we manage, and we realized there’s a much larger opportunity to help investors (like ourselves!) buy and sell these properties through access to our proprietary rental data.

There are a lot of new companies around the upscale, managed medium-term rentals market and a lot of them didn’t do very well during the worst of the pandemic. Who are Rove’s competitors, or are you building a new niche? 

Rove’s competitors for the marketplace are RoofStock and Zillow. There’s not yet a platform dedicated to buying and selling short-term rental properties; that’s what we’re building.

Regarding luxury short and medium-term rentals, Rove’s closest competitor in vacation markets may be AvantStay.

Before the pandemic, a lot of venture-backed management companies scaled with a growth-at-all-costs mindset. Many had asset-heavy business models that left them very exposed to a recession or black-swan event. At Rove, we’ve built an asset-light business being very thoughtful about our quality of revenue and margins as we grow.

What is one thing our readers might not know about but would probably find interesting about the vacation rental market in the US?

In Park City, Utah, there are approximately 500 properties for sale currently, but we estimate only ~100 of those properties are zoned for nightly rental permits. These homes are either in a section of the city that does not allow for nightly rental use, or they are in an HOA (homeowner association) with a restriction on nightly rentals. 

Finding and buying short-term rentals shouldn’t be so complicated!

Rove recently secured a $4 million seed funding round. What will you be using the money for?

This funding is being used to expand the team. We’re hiring across several roles!

What is Rove’s monetization model?

We monetize in two ways: 1) if we help a homeowner buy or sell a home through our marketplace, we take a transaction fee on the sale and 2) we have management agreements with the homeowners we partner with in managing their short-term rental investment properties.

What is the most common request from clients?

It varies by market, but pools are highly desired in Scottsdale, hot tubs in Park City, and in-unit washers and dryers in New York city are commonly requested. All Rove properties in these markets have these amenities.

How do you see the market evolving and what will you be doing to be ahead of the curve?

We are still in the early innings of the short-term rental market. It’s very exciting because as Airbnb has changed the way people travel over the previous 10 years, there’s still a huge opportunity for companies to improve both the experience of investing in, buying, selling, and managing short-term rentals, as well as the guest experience and consistency between rental properties.

The institutionalization of the market is also very early. There’s been ten’s if not hundreds of billions of dollars put into the single-family residential (SFR) space by Wall Street, led by Invitation Homes (NYSE: INVH). I expect to see similarly exponential growth in institutional demand for short-term rentals, hospitality properties and portfolios as this alternative asset class provides above-market returns.