As a single person who’s ever tried renting an apartment in an Indian metro, you’re probably familiar with the hassles involved. Finding the desired mix of a good property in a convenient location with all the right amenities is challenging. With many stereotypes and prejudices prevailing about singles, it’s not uncommon for homeowners to be wary of renting to them. So, you end up haggling with brokers, overshooting your budget, settling for a less than satisfactory deal, and compromising on your quality of life.
Prabhat Kumar Tiwary had witnessed this problem play out many times, and saw an opportunity in the space for managed home rentals for singles in India. In April 2016, he co-founded YourOwnROOM along with Sachin Joshi and Dr. Rewat Laxman.
“There is a big demand-supply gap in rental properties for single tenants. On the one hand, there are discerning singles who can afford to rent good homes and on the other are vacant, locked-up, unsold properties. This stems largely from a trust deficit between homeowners and single renters,” says the Sloan Master's Fellow, from Stanford Business School.
Not just another brick in the wall
The online house rental business in India has had a chequered past. It has seen a new breed of startups take on established property listing portals like Sulekha, 99 acres, PropTiger, and Magic Bricks with unique solutions to simplify the search for a home. Their promises – of trusted technology solutions, speed and convenience - were hard to ignore, and initial traction and large rounds of funding followed. But the Midas touch these businesses briefly enjoyed quickly waned. 2015 saw exits, mass firings, and restructuring by marquee players in the online real estate business.
The need for technology ventures that went beyond listing and provided holistic solutions throughout the rental lifecycle began to be felt.
YourOwnROOM provides home-owners and single renters, platform and associated services to lease, rent, and manage properties. Largely targeted at the 20-45 working singles demographic, it allows you to find and rent a room in a conveniently located apartment.
The startup currently operates two models - one where it leases properties in strategic locations in the city and sublets them to singles looking for accommodation. “Right from acquiring properties, furnishing them and listing them on our portal to conducting site visits and reference checks, collecting deposits and getting the agreement signed, we provide end-to-end support right up to the handing over of the property and managing it,” explains Tiwary. The other is the list-to-manage model where the startup gets involved at the listing stage.
“Both parties are looking for more than just discovery. They need significant handholding and follow-up services for an experience that’s mutually satisfactory,” says Tiwary.
YourOwnROOM circumvents the network of brokers and offers brokerage-free services to renters. It also allows people who cannot make a long-term commitment on a property to secure a home with a 3-month deposit and a 4-month lock-in period. “The main advantage we offer is properties in strategic locations that reduce commute time to under 15 minutes and improve one’s quality of life,” he asserts. The company has partnered with a leading payment gateway to facilitate online payment of booking amount, deposit, and rent in a seamless and transparent manner.
Professional property management services and regular property audits are other features which the company offers, at a 12 percent commision. “We offer homeowners premium, uninterrupted rent and conduct stringent screening of prospective tenants,” says Tiwary.
Hitting a homerun
YourOwnRoom has close to 100 tenants and 50 properties under its belt. “We are adding 25-30 new tenants every month and are targeting to grow to 1,000 tenants in the next 18 months,” Tiwary informs.
Operational in Bangalore and recently in Pune, YourOwnROOM is focused on building a coherent, scalable model before it makes good on its ambitious plans for further domestic and global expansion.
Tiwary sees proof of the model’s success in the company’s ability to generate revenue a few months into operation. “We expect to close this fiscal year with revenue of close to a crore and are looking at 10X growth in the next financial year,” he says.
On the anvil are flexible, EMI-based payment options and point-of-sale payments while booking a property, as well as an app to make the rental process faster and more convenient, promises Tiwary.
As it acknowledges the competition from established players in the managed home rental space for singles, YourOwnROOM is optimistic about the potential for growth and scale. Big Indian cities today attract single, working professionals able to afford a good quality of life and the demand for rentals is exploding. At the same time, there are a growing number of idle, locked-up properties that owners could earn rental income on.
The business is bridging this gap and creating a strong ecosystem by entering into partnerships - with builders and NRIs to secure strategically located properties and with investors looking to maximise rentals on existing inventory. Tie-ups with recruitment companies looking to increase conversion ensure a consistent, sizeable floating population of professionals seeking accommodation.
Room for growth
YourOwnROOM has company as it navigates India’s $20 billion residential rental market, the most noteworthy of which is Nestaway. Launched in 2015, Nestaway, which raised $30 million Series C funding in April this year, is the clear frontrunner in the managed rentals for singles game. Competition also exists in the form of players such as Grabhouse’s newest offering, Cocoon, Squareplums, CoHo, Homigo, and Zenify.
According to Tiwary, “The landscape for rentals today is a fragmented, untapped one.” He adds that the startup’s robust technology platform enables the 10-member team to provide end-to-end property management and a great customer experience.
Bootstrapped thus far, YourOwnROOM is gearing up to raise funding from angels and growth-stage VC firms. “All these months, we wanted to prove our concept and get initial traction. Now, we are at a stage where the idea has converted to reality and the response we are getting is encouraging,” he says.