Khristopher J. Brooks is a guest blogger for Betabeat.
There’s something calming and relaxing about having ample time to find a new apartment in New York City, something tranquil, something peaceful, something that New Yorkers Avi Dorfman and Samuel Sheinin are manipulating a bit.
These guys have created this web site, RentJolt.com, and it’s supposed to prevent you from freaking out and trying to find an apartment at the last minute.
Here’s how it works. You’re a current tenant somewhere, but you plan to go backpacking in Europe 10 months from now. These guys want you to post that your place will be free in the later parts of the year. Add photos. Add rent price. Add info about your landlord. Don’t worry. Posting is free.
If someone ends up renting your place, Mr. Sheinin and Mr.Dorfman will give you anywhere from $500 to $1,000, depending on how much rent is at your place. The incoming tenant, who still has to work with a broker to negotiate the lease terms, will pay a reduced brokerage fee (Mr. Dorfman says 5.75 percent as opposed to the average 12 percent).
That’s how RentJolt makes money: 1.75 percent goes to the current tenant; 2 percent goes to RentJolt’s broker partner; and the rest goes to RentJolt. “The economics work for the broker because his net margin is typically about 11 percent after including the cost of having agents, space, listing department, etc.,” Mr. Sheinin said in an email. “The amount he makes per transaction in our model becomes equivalent as the costs are stripped out (all he needs to do is close deals). Our cost structure is also quite lean, so at two percent, with an average rent of $3000, we generate about $700 of revenue per transaction.”
The site’s not done yet, although the home page looks nice as is. At this moment, there are four listings, including a cozy two-bedroom spot in Midtown. Fifth floor walkup. Exposed brick. Fifteen-foot ceilings. Remote-controlled fireplace. (FYI: It becomes available Feb 28, for those of you who can swing the $3,780 in rent.)
At some point, Mr. Dorfman wants the site to host a calendar feature that shows when and which listings will hold an open house.
A former McKinsey & Company employee, Mr. Dorfman told us that because potential tenants have many months to consider each listing, he believes a vast majority of the places listed will eventually sell. The secret, he says, is posting good pictures. And by good, he probably means clean up the living room and kitchen BEFORE you snap the photos.
None of your well-known New York City venture capitalists have thrown dollars to this site (yet?) The guys are working off money from friends and family. Humble beginnings. Let’s see where they can take this thing.