This Gurugram-based startup is helping property owners remotely manage real estate
Managing a property is no easy task, especially when you are sitting miles away. The list of tasks includes repairs and maintenance, collection of bills, finding a tenant, getting the paperwork done, and so on.
This calls for the need to have a single point of contact who can handle every aspect of property management.
Working in the US, Gopal Mishra underwent a similar complication while managing one of his properties located in Gurugram. On the other hand, his close friend Vinay Prajapati, who was already operating in the real estate space, was scouting for newer opportunities in residential property management as he witnessed a rise in demand.
Sharing a common interest in tech and real estate, the duo decided to solve this pain point using tech.
As Prajapati was already running a real estate brokerage firm since 2014, the duo decided to pivot the business in 2017 and enter into the residential property service segment with a new identity — Propdial.
They bootstrapped the startup and commenced operations from Gurugram, picking up properties of friends and relatives living in the US.
Gradually, they learnt the tricks of the trade, besides gaining feedback, and set out to strengthen the business. With just word of mouth, the company started getting leads and soon, the numbers picked up.
Providing ROI and peace of mind to NRIs
The platform has created a single Property Management Package (PMS) for customers, which includes end-to-end service for property management. A one-time annual fee in the range of Rs 10,000-20,000 is charged, based on the size of the property.
The services include:
- Repairs and maintenance
- Payment/collection of bills
- Interior works
- Rental services (advertising on Propdial and other portals, marketing through brokers and finalising tenant)
- Tenant credential check, tenant move-in to property, legal paperwork
- New property deals
Once a client approaches Propdial, a simple agreement is signed and the company takes over the property. A dedicated manager is then assigned who takes over the keys, conducts the first-level inspection, and reports directly to the owner.
The customer has access to its unique account, where every detailed report is uploaded, including legal documents, inspection reports, tenant leads, repair work, visits, etc., along with pictures. Gopal says this is aimed at providing relief for owners, especially given the illegal possession prevalent across cities.
The founders observed that many clients do not want to rent out property but want to just maintain it. However, the annual fee remains the same, whether the customer chooses to opt for a single service or multiple options.
“We want to offer a complete journey. We tried offering separate services but did not see any value in that,” says the co-founder, adding that the customer living abroad does not mind paying a one-time annual fee in exchange for “complete peace of mind”.
Propdial has entered into three strategic partnerships with — housing.com, MyGate, and ApnaComplex. While the partners get to create a one-stop-shop for their customers, the startup makes gains via new customer acquisitions.
“The lead generation has shot up by 20 times post partnerships, while the cost of customer acquisition has come down, boosting our revenue. We have a first-mover’s advantage in terms of integration with big realty platforms, and more such deals will be witnessed in future,” says Gopal.
Propdial operates on a blend of subscription and commission. Besides the one-time annual fee on the PMS package, the startup charges a 15-day commission on the rent, in case the tenant lead is generated from its channel.
A commission is made on the lead generated from a partner channel as well. The owner is free to bring their own potential tenants as well, in which case, no fee is charged.
The third stream of revenue comes from the commission charged/referral charges from over 200 service partners listed on the Propdial platform.
In less than four years, the company has set foot across 15 cities and 7 states, including Karnataka, Maharashtra, Haryana, Uttar Pradesh, Telangana, Rajasthan, and Delhi-NCR, managing properties worth Rs 750 crore.
Clocking a revenue of around Rs 1 crore in FY20-21, the business has witnessed almost 10 times growth in the last three to four years of operations, in terms of revenue.
“We get around 1,000 qualified enquiries per month, 250-300 per week. In terms of business composition, the in-house channel of Propdial manages 70 percent NRIs business and 30 percent Resident Indians (RI), while the partner channel contributes the opposite,” says Gopal, adding that the digital marketing of the company has been focused around NRIs since the beginning.
Propdial Delhi-NCR team
Competition and the market
Many players are operating in the residential rental management space such as NestAway, Homigo, CoHo, Zenify, and others.
The difference between Propdial and other players, as the co-founder explains, is that the latter operates in the subletting of properties by taking the ownership, while the former operates in end-to-end service.
“Their (competitors) focus is on generating as much revenue as possible from the residential property. The owner doesn’t have any control over the choice of tenants and is provided with a lump sum amount while the company makes a commission. The aim is just to have the property occupied,” says Gopal.
Whereas, in Propdial’s case, the aim is to take care of the overall property.
“The rent agreement is signed between the owner and the tenant based on the latter’s choice. The control remains in the hands of the owner. This proposition sets us apart. Besides, there is an assured income for us whether the property is occupied or not,” he adds.
According to IBEF, the real estate sector in India is expected to reach $650 billion by 2025. In the top seven cities, housing sales increased by 29 percent and new launches by 51 percent in the fourth quarter of FY21.
The demand for residential real estate is expected to grow further as homebuyers take advantage of low mortgages, developers’ incentives and low interest rates. As the number of housing projects rises, demand for property management is expected to only rise, along with tie-ups with big realty players to offer end-to-end services.
The startup plans to reach out to 12 states/30 cities in the next two to three years while aiming to clock Rs 200-crore revenue. To date, the company has raised $500,000, both internally and externally, and is ready to go in for its next round.
“We are planning to raise pre-Series A funds in the upcoming quarter to the tune of $2-3 million to fuel growth and build tech,” says Gopal, adding that the company is in discussion with multiple listing platforms for integration.