The chang­ing face of rent­ing

Arkansas Democrat-Gazette - - MONEY&MARKETSEXTRA - In­ter­viewed by Josh Boak. Edited for clar­ity and length.

Ris­ing home prices have led many Amer­i­cans to be­come ren­ters. John Kobs, co-founder and CEO of Apart­ment List, be­lieves that a grow­ing num­ber of peo­ple don’t want to be tied down to a spe­cific place when mak­ing ca­reer and life choices. Kobs spoke with The As­so­ci­ated Press about the out­look for the U.S. home rental mar­ket.

What changes do you ex­pect in the mar­ket for rental hous­ing?

High level for us. The next 30 years in the rent­ing econ­omy is go­ing to be very dif­fer­ent from the last 30 years. We’ve seen 2 mil­lion house­holds with $100,000 in­come be­com­ing ren­ters. De­mand for rent­ing sin­gle-fam­ily houses has in­creased by 40 per­cent since 2000.

The dream of home own­er­ship has kind of been tainted a bit over the last decade with the mil­lions of fore­clo­sures we saw. It’s shifted the mind­set of Amer­i­cans for pre­serv­ing flex­i­bil­ity.

Why are you think­ing in terms of decades, rather than years or quar­terly?

This is one of the largest clas­si­fied cat­e­gories that hasn’t been won by a startup. We try to skate where the puck is go­ing. For us, when you’re try­ing to solve pain points for such a large au­di­ence, you have to think of decades so that there is a solid foun­da­tion to help ren­ters tran­si­tion for years to come.

How did your busi­ness change since your found­ing in 2011?

There are two chap­ters of Apart­ment List. For the first sev­eral years, we were pri­mar­ily fo­cused on build­ing a search pro­gram. But be­cause we were work­ing with ag­gre­ga­tors, we couldn’t achieve suc­cess in terms of list­ings.

Af­ter get­ting ven­ture fund­ing in 2013, we shifted the busi­ness model in 2014 to a two-sided mar­ket­place where we could match ten­ants and land­lords. Now, we have 5 mil­lion list­ings.

It was crit­i­cal that we were sur­fac­ing ac­cu­rate in­for­ma­tion di­rectly from land­lords.

For us, the sup­ply of list­ings comes from land­lords. Ren­ters are the de­mand side. Our pri­mary goal is to have a liq­uid sup­ply of rental list­ings. Fur­ther, our model is such that we’re only paid by land­lords when we suc­cess­fully match the ten­ants with a home.

What’s the chal­lenge for a busi­ness such as yours?

Ren­ters are only in the mar­ket for a home ev­ery two or three years. Their av­er­age du­ra­tion is 23 months. So how do we stay at top of mind with con­sumers when they’re not in the home dis­cov­ery phase? This means find­ing a way to cre­ate a com­mu­nity be­yond the trans­ac­tion.

What trends do you see as shap­ing the hous­ing mar­ket?

Fifty-four per­cent of work­ers say they would switch jobs if they had flex­i­ble work hours. It con­tin­ues to un­der­score how im­por­tant mo­bil­ity is be­com­ing for pro­fes­sion­als these days.

John Kobs CEO Apart­ment List

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