According to its CEO, 2019 is set to be a big year for the automated home rental platform
By LYDIA NATHAN / Pics By TMR
When Adam decided to rent out his second property — a condominium in a prime area — he went about looking for an estate agency that he could rely on.
Remembering the hassle he previously had with the bossy, incompetent real estate agent who took home a big fat cheque after renting out his first property, he was almost at his wits’ end.
Until a friend recommended home rental platform Speedrent.
Adam learnt that Speedrent connects landlords to tenants online, but does everything in between — from arranging the home viewing, to signing the tenancy agreements digitally and collecting rental on the landlord’s behalf without the tenant needing to pay deposits.
The only thing that Adam had to do was to sign up on Speedrent’s app, upload photos of the condominium and show the potential tenant the place when the time came.
Speedrent officially began its business at the end of 2015, focusing on the rental market in Malaysia.
Its CEO Wong Whei Meng told The Malaysian Reserve the company decided on the business first because it was a very underserved market.
“There are many websites doing property sales, but not many focusing on rental.
“Selling is a one-time transactional deed, but rental is an occurring ongoing business deal,” he said.
Wong added that business has been good, having grown 200% between March and November this year alone.
“We are targeting a 400% growth for 2019 and we believe it is achievable. We have seen a 5%-7% success rate when renting out homes, depending on the price range, location and the quality of the property,” he said.
In order to achieve the triple-digit growth for 2019, Wong said the company will conduct a crowdfunding process in December 2018.
“With the business growing, we are seeing a bigger need for more automation and higher-level technology to support the platform.
“So, we have chosen to crowdfund and invest the funds into artificial intelligence, as well as marketing,” he said.
Wong said the company aims to generate between RM300,000 and RM3 million, and the process would go live for a month.
“From the funds, 20% will be invested into research and development, while 50% will go into the marketing cost and the remainder for various operational costs.
“We have received an extremely strong response already, exceeding the RM3 million (target), so we plan on being selective with our investors. That is a very good position to be in,” he said.
Wong said this is not the first time that the firm opted for crowdfunding. The platform raised RM400,000 within a week of being launched in March 2018, and it was carried out with Speedrent clients who were home landlords.
Wong also said he plans to more than double the headcount of Speedrent staff. Currently, the company has 22 employees and the ideal number to meet all the demands is 50.
“By upgrading our staff and allowing them to venture and learn about machine learning and automation, it would help simplify the process for our customers,” he said.
According to Wong, 2019 is set to be a big year for the automated platform — particularly for do-it-your- self landlords.
The plans include entering the market for room rentals, wherein the same model as home rentals will be used.
“We did an independent survey for the landlords to gauge the kind of reactions landlords may have towards room renting.
“About 70% of landlords said it is too troublesome to rent rooms because of the rent collection, splitting of utility bills and such. They would try it, however, if those concerns could be solved,” Wong said.
Wong is optimistic that Speedrent could solve the problem of overhung middle to upper range properties.
He said in the current rental market, high-rise properties have become more popular as these properties apparently offer more convenience. “Most landed properties will have a garden or outdoor area that needs maintaining and the younger generation does not want or have time for all that,” Wong said.
Another area that Speedrent would upgrade is the maintenance part of home rentals, where tenants can file complaints on any broken or damaged issues in the house.
Wong said since all communication takes place online on the app, he hopes to create a space where tenants can upload photos of the damaged area or item and allow Speedrent to communicate with the landlord and arrange for someone to fix it.
“If the landlord can give us a threshold amount to fix the damage, we will arrange for everything to be done without needing either landlord or tenant to worry,” he said.
Wong said this will also enable them to form partnerships with skilled workers like plumbers or general contractors to send out.
“This feature will start in the second half of 2019. We will launch with a local company called Kaodim that provides skilled workers,” he said.
To protect landlords from dodgy tenants, Wong said the company has very strict policies in that area.
Speedrent currently enlists the help of two credit rating agencies, CTOS Data Systems Sdn Bhd and RAM Credit Information Sdn Bhd, to ensure all tenants on the platform have a good credit score.
“We are very stringent, for good reasons. So far, we have turned down about 60% of tenants due to bad credit scoring,” Wong said.
Meanwhile, Wong added that Speedrent’s revenue is derived from selling property insurance to the landlords, which is a prerequisite for all the clients.
“We do not take any cut from the monthly rentals, instead we are licensed insurance agents who built a rental platform to generate leads to sell insurance,” Wong said.
He said the home insurance will cover up to RM26,000 for the whole tenancy period, which is usually for a year.
“We don’t get any commission from the monthly rentals because we are not licensed real estate agents. We only make money through the insurance,” Wong said.