Whether you are single or with family, finding a house for rent is a painful experience, especially in the metros. If you find one to your tastes, the rent is too high, or the location too far from your place of work. Broker fees are an additional pain. Despite the multifarious models of online portals that facilitate ‘house hunting’, the process usually takes weeks, or sometimes even months – mostly because the pictures you see online are drastically different from what the house actually looks like.
Three friends – Ponnusamy Arukkutti, Yokesh Sundaram and Rajasekar Arumugam, who completed their Engineering in PSG College of Technology, Tamil Nadu – faced the same issues while looking for houses in Bengaluru, Mumbai, and Delhi respectively. Finding a rental property that met their basic needs and certain preferences was harder than they had expected. Better options might have been hidden among the 200 or so search results on online portals, but they had to “settle” for a place when the hunt got too tiring.
Deciding that they would find a solution for this problem, the trio, along with their friend Kishore Gudimetla, a software architect, founded PeppyWalls in December 2015. PeppyWalls is an online platform aiming to help home-seekers access rental homes adhering to a set of pre-verified standards and benchmarks. PeppyWalls benefits landlords as they get maximum potential tenants visiting their properties.
The concept of ‘rental assistance’ has scaled up to a new high. PeppyWalls enables home seekers to find rental homes that fit their tastes through the free search on its website. Their ‘One day Challenge’ campaign saves a lot of time for the home-seekers: their rental preference is noted, and appointments are arranged with matching properties’ owners for visits. A PeppyWalls field executive will accompany the home seeker during the visits to their preferred properties for Rs 499 on weekdays and Rs 699 on weekends. So far PeppyWalls has done more than 200 rental assistance service across Bangalore.
PeppyWalls has tie-ups with online product-rental platform GrabOnRent as well as some professional rental assistance companies to get inbound rental requirements. Since Bengaluru is famous for medical tourism, PeppyWalls has also tied up with doctors in such a way that if the latter come across foreign patients who need to be in Bengaluru for a long period of time, PeppyWalls can help them find houses for rent. Additionally, they have also tied up with Timesol, a service company who provide rental assistance and movements, for home seeking and guided rental assistance to their end clients.
PeppyWalls’ platform is free of cost for properties listed by owners and agents. Yokesh says, “Property owners also lose out on rents if they do not get tenants on time. Such gaps happen predominantly due to their properties not meeting the expectations of home-seekers in areas like lighting, ventilation, kitchen space and bathrooms.”
PeppyWalls defines standards for these parameters; hence, any rental property listed on the platform assures that these standards are met - by persuading landlords/agents to adhere to the same so that they get maximum tenants looking at their properties. Owners get good value for money spent on refurbishing the property, and tenancy gaps are thus minimised, enabling constant inflow of rents.
The margin is gained from their home-standardisation vendors. Yokesh says, “Usually, when the tenant moves out, they pay a month’s rent for refurbishing the property. We propose that the owner reach out to us so we can refurbish in less than a month’s rent.” Their current average monthly revenue is Rs.41,000, with rental assistance making up 70% and the rest with home standardization.
Home-seekers also get access to all pre-verified property listings free of cost. It is the property standardisation that achieves revenue for PeppyWalls. Currently, the portal has more than 1,500 handpicked listings covering over 25 locations across Bengaluru. Branded hostels and PG homes are also listed on the platform.
The startup is presently bootstrapped, having started with about Rs 24 lakh. Yokesh said that they plan to raise Rs.2-3 crore in funding this fiscal year to cover corporate and operational costs and achieve gross monthly revenue of Rs.13 lakh this year, and scale up to Rs.25 lakh by next.
The PeppyWalls team includes 12 members spread across IT, operations, and business development. They are launching app in Q4. Their future plans include widening this standardised rental portfolio in Bengaluru to grab 8-10 percent of rental share and 30-35 percent of home refurbishment in the city.
The business model is scalable, and PeppyWalls is targeting metro cities like Chennai and Hyderabad next. Their target for the next two years in terms of revenue is Rs 4 crore from Bengaluru alone.
The residential rental market in India is estimated to be worth $20 billion. Possibilities are many in the property rental space, particularly in tier I cities. The last few years have seen startups venturing into the space, with Housing, CommonFloor, Grabhouse, Magicbricks, and Zenify among them. There is always space for innovation with not just business models but technology as well, as in how AR and VR are becoming mainstream in the interior design sector. Next time you are looking for a ‘home sweet home’, it may turn out to be easier than you expected.