Apartment pain inspires rental service
Three students left school to found Onerent, a tech-savvy property management startup
SAN JOSE >> In hunting for apartments around Santa Clara University, three undergraduates found mad competition, broken promises and high rents for cramped quarters.
They had an idea — let’s make the search easier.
By bringing better technology into the apartment-hunting process, they wanted to create a platform that would allow tenants to search, apply and sign a lease online while also giving landlords better technology to market and manage their properties.
In March 2014, a few months after their apartment search, Greg Toschi, Chuck Hattemer and
Rico Mok quit school and were running a real estate startup, Onerent.
“No one was really pulling it together,” said Toschi, 24, a San Jose native and graduate of Bellarmine College Prep. “None of it was consistent for renters.”
Onerent, based in San Jose, serves as a platform for landlords and tenants, offering property-management services, including listing and showing units to prospective renters. It collects fees from landlords for placing tenants and handling rent collection, maintenance and other services.
The property management field is crowded and well-established, with local connections generally done
through word-of-mouth. The Onerent founders want to create a better service for landlords and tenants, with helpful technology such as dashboards, and lower property-management fees.
The three weren’t looking to disrupt the real estate market when they met as undergraduates in a coed business fraternity at SCU.
They bounced around a few ideas for a business but struck on one that felt close to home — apartment shopping. They had been through the search process to find units near campus and found it “a total pain,” said Hattemer. They tried to rent together for their junior year but were thwarted by property managers demanding quick down payments or changing lease terms. Toschi had to sublease a room, and Mok
ended up living in a converted closet.
After forming the company, they drove around to property managers and landlords, making cold calls and waiting in lobbies to introduce themselves and show off software designed to make the rental relationship more transparent.
Hattemer, 24, said it was often hard to get in the door. But they had a few early investors and Bay Area property managers willing to take a chance on the startup.
“They do not give up,” said Michael Zee, an investor and board member. “They do not quit.”
Zee, a former Google lawyer, believes better technology can make property management more efficient and easier for landlords to adjust rents and fix problems at their properties.
Onerent has grown to about 12 full-time employees, with a call center in the Philippines managed by Mok. The company has raised about $8 million in funding from investors and has expanded its services from the Bay Area to several West Coast cities, including Los Angeles, San Diego and Seattle. The company partners with local real estate agents to show properties.
The company has been criticized in online reviews for having poor communications and sometimes slow responses to urgent problems in rentals.
The founders acknowledged the missteps. Toschi said that rental management firms generally receive poor reviews — tenants get angry if a leak or an air conditioner isn’t fixed promptly — but the company is striving to do better.
It’s tried to reach tenants through preferred methods of text, emails or phone calls and has automated more of the process to respond more quickly. “It’s a tough business, because you are a middleman,” Hattemer said.
Sandeep Sukhija, a real estate investor with about 20 East Bay rentals, was looking for a more techsavvy way to manage his properties. Sukhija, a software engineer, wanted to work with a startup and craft a system that would give him better insights into how many times his properties were shown to prospective tenants and whether the rent was late.
He met with Onerent and was impressed with the co-founders’ energy. He placed two properties under Onerent management. As Sukhija grew more comfortable
with the service, he gradually moved his portfolio to Onerent, which fills the units and collects the rent for him.
“It was worth the risk,” he said.
The company also is opening a new program for renters, offering discounts on broker fees for home purchases made through Onerent agents. The discounts, equal to 20 percent of monthly rent, accumulate the longer a tenant stays in some Onerent-managed properties.
The founders hope this will increase the quality of tenants and give renters an incentive to choose its properties.
“Your rent money,” Toschi said, “is now an investment in your future.”