According to Pew Research, 44.2 million people — or 36% of the nation’s 122.8
million households — rent their homes.
To help them, Sherman Oaks-based proptech startup RentSpree provides a platform for the booming rental market.
RentSpree offers a number of tools, including tenant screening and credit checks. The entire process of renting an apartment is done online in one place, eliminating the laborious process of scanning and faxing documents. In addition, the credit-check feature on the site is a soft credit check, so it does not impact a user’s credit score.
“We eliminate the need to pay an application fee or refill the same information each time to qualify for a property,” RentSpree chief executive and co-founder Michael Lucarelli said.
RentSpree has set out to become a one-stop site for renters, agents and landlords, homing in on independent multifamily owners.
“What most people don’t realize is that these mom-and-pop landlords make up more than 50% of the rental market,” Lucarelli said.
More services offered
The site initially dealt with applying for properties, getting qualified, and credit and background checks. However, the company is expanding its services.
“Payments is one that we launched now over the past year,” Lucarelli said.
RentSpree, which was launched 2016, has 210 employees. About 60 of RentSpree’s staffers are based in Sherman Oaks, and 150 employees are in an office in Thailand, which is where RentSpree co-founder Paul Sirisuphang is originally from.
Lucarelli and Sirisuphang met on a retreat while in Pepperdine’s MBA program. They founded RentSpree a month before graduation. The duo raised $120,000 in a friends-and-family round of investment. Later, a seed round brought in $2.3 million and a Series A round yielded $8 million. Last month, the company raised another $17.3 million in a Series B round led by financial tech investor Green Visor Capital.
RentSpree has partnered with Rentals.com and the California Association of Realtors, which also wound up participating in a funding round for the company. RentSpree has also aligned itself with five different multiple-listing services.
“We strive to create an equal playing
field for renters, landlords and agents,”
Lucarelli said.
According to Lucarelli, the average age of a first-time homeowner is increasing, which means more people are in the rental market.
“One thing that we’re doing with our platform is reporting rent payments to the credit bureaus,” Lucarelli said. “The rent payments that people make are the largest single payments that people have to make on a monthly basis. These payments that people are making in the vast majority of circumstances are being made on time, but it’s not being taken into account to build their credit history. We will share those on-time rent payments with the credit bureaus.”
Ultimately, this puts users in a better position to apply for a mortgage and purchase a house in the future.
Revenue for the company largely comes from the $38 application fee that rental applicants pay, Lucarelli said.
“If a renter pays that $38 fee as a renter, the last thing you that you want to feel as a renter is that you’ve been taken advantage of,” Lucarelli said. “We don’t want the renter to pay and apply to a property and then never actually be considered for the property. So if the renter pays to apply and the landlord or agent never actually opens the reports on RentSpree, then our system automatically refunds the renter.”
Others in the sector
RentSpree has joined a crowded playing property-technology field that includes L.A.-based firms Crexi, Ylopo, Endpoint and RealtyMogul. Recently, several players in the proptech space have struggled with layoffs and financial problems, including digital mortgage firm Blend, title insurer Doma, rental listings provider Zumper and mortgage origination site Better.com, which have all laid off staff in the past six months. Meanwhile, the financial statements of Tishman Speyer-backed Latch have been revealed to be unreliable as the company warned the SEC of “material errors and possible irregularities” in its financial reporting. Latch plans to restate its financial statements for the affected quarters.
Nevertheless, Lucarelli hopes to see 30% of U.S. real estate agents using RentSpree over the next two years, and he’s on the road to achieving that goal through RentSpree’s partnering with multiple listing services, brokerages, realtor associations and other proptech platforms.
What Lucarelli loves the most about his entrepreneurial role at the company is “the value that we’re delivering to users.” He also enjoys how far more effective and efficient he is working with his colleagues.
“How you can shift your own skills and responsibilities like I was doing a hundred different things at one point,” Lucarelli said. “You can now build a team that can not only handle all those things but they can actually do an exponentially better job than I ever could.”