Sydney startup :Different has developed a fixed-fee residential property management service
As Australia’s obsession with the property market has continued to develop, 2017 has seen the launch of a number of fixed-fee real estate agent or sales platforms enabling owners to either sell their property themselves, or lock in an agent for a fixed price rather than the usual commission model.
Applying this approach to property management is Sydney startup :Different.
Founded by husband and wife team Mina Radhakrishnan, formerly global head of product at Uber, and Ruwin Perera, previously of Google and SoftBank, the startup looks to make it easier – and cheaper – for owners to manage residential property through a fixed-fee service.
As Radhakrishnan puts it, :Different “makes it easy for owners to monitor and report on their investment, good tenants to live in the property, and for services and problems at the property to be undertaken or resolved efficiently and quickly” by letting tech take care of the routine stuff that can be automated and enabling a property manager to focus on the other things that require a personal touch.
The idea came when Radhakrishnan and Perera helped to review the finances of Perera’s parents when they retired. Through this process, they discovered the property manager his parents had used for more than two decades had regularly increased fees, “for no apparent reason or service upgrade”.
“When I asked my father-in-law about it, I was told they didn’t really have a relationship with the property manager or understand what they did. The property manager had a new person on their property at least once a year, making long term relationships and knowledge banks difficult. We soon realised this was a common occurrence,” Radhakrishnan explained.
The pair quickly realised the opportunity: the property management sector is worth between $4 billion and $5 billion a year, but it hasn’t changed all that much over the last few decades. With people now expecting to be able to book a car or hotel with the swipe of a button, Radhakrishnan and Perera saw no reason why property management shouldn’t be the same.
“Most property owners are everyday people – three out of four negative gearers own just the one property, and two out of three have incomes $80,000 or less. A lot of these people find the administration and hassle of owning property and working with the property manager a real drag,” Radhakrishnan said.
“They want to be property investors, not property managers. Now :Different has built simple, user-friendly apps and combined them with proprietary backend systems and the very best agents to create a new services business from the ground up.”
For $100 a month, plus GST, :Different covers everything from the leasing process to rent collection, inspections and maintenance.
The system has owners set up a direct debit system to receive their rent as soon as they receive a tenant’s details, with :Different monitoring the accounts and following up on any delays. It also manages maintenance requests, with an approved request automatically getting sent out to the most suited tradesperson in the :Different network based on criteria such as location and the scope of the issue, and has full reports filed to the owner’s portal following an inspection, with videos and 360 degree photos provided.
Getting a new tenant will require an additional fee of $1,000, while :Different provides free Landlord Insurance to owners for the first 12 months. :Different will also pay rent if it is more than five days late.
For Radhakrishnan, the flat fee concept is the most important part.
“We don’t think the traditional way of charging percentage fees of rent is fair to owners, because the work required to manage a property doesn’t vary with the weekly rent,” she said.
Beyond the tech, however, the people are key to the operation – the property managers themselves. To help in this respect :Different has brought on Scott Dolce, formerly of McGrath and LJ Hooker, to lead its growth team, and it is currently looking to hire a head of operations.
“You don’t rebuild property management with software alone – you need the right people who can work with us to create a world where we let people do what people do best, and let technology do the rest,” Radhakrishnan said.
“We want people who think like owners, so we make them owners. We have an employee share scheme giving them equity in the company as they progress with :Different because we’re building this company together.”
The startup in October raised $1 million in seed funding from investors including local VC firm AirTree Ventures, Silicon Valley’s Foundation Capital, and real estate agent Tim Foote.
“Our goal is to build a global company from Australia. We sold our houses to initially fund this business, we sank a lot of our own money in to get it to launch, but we recognised that to build a brand, it’s critical to have the right partners on board,” Radhakrishnan said.
AirTree, Radhakrishnan said, have key relationships with the “who’s who” in Australian real estate, tech, and product development, while she said Foundation Capital is a great partner for the startup given its global ambitions.
Just over a month on from launch in Sydney, Radhakrishnan said the startup is pleased with its growth so far.
While there are a couple of other tech players in this space, such as Cubbi and Rentwolf, :Different considers traditional property managers as its main competitors, but on those tech players, Radhakrishnan believes features such as the landlord insurance and rent guarantee set :Different apart.
Looking to 2018, the goal is simple: “100 percent customer happiness,” Radhakrishnan said.
“If we create joy for owners and tenants, from that, all things follow. We want to grow, and we want to keep costs in control, but we are investing in great technology and great user experiences, and we are investing for the long term.”
Had enough of all the startup buzzwords? So have we. That’s why we’re asking the startups we chat to to send us a video where they pitch their business in a way that’s easy enough for even the most technophobic of grandparents to understand:
Image: Ruwin Perera and Mina Radhakrishnan. Source: Supplied.