Austin startup TenantCloud making life easier for landlords, tenants and contractors
Only the most OCD among the population don’t do it.
After people buy a washing machine, a microwave, a refrigerator — they put the warranty in a drawer and forget it. Inevitably, the appliance breaks and the owner often can’t remember if he or she even signed up for the warranty.
If that person happens to be a do-it-yourself landlord, such maintenance expenses may mushroom and defeat the income-generating purpose of renting out a property.
Austin startup TenantCloud LLC aims to solve that problem with free online tools. It collects revenue through a percentage of fees paid to service workers such as plumbers or electricians who bid on projects through the online portal.
The company is not yet profitable, said co-founder, CEO and President Joe Edgar. It generates about $1 million in revenue annually, he said, and operates in 40 countries and roughly 6,000 cities.
About 20 full-time workers compose TenantCloud’s staff, he said.
“We will be hiring more Austin-based salespeople — five in 2017 — and in 2018, it will be more like 20 to 30,” Edgar said. Next year, “we will be looking to raise $5 to $8 million.”
TenantCloud competitors include California-based Yardi Systems Inc., Carrollton-based Real Page Inc. and California-based AppFolio Inc.
TenantCloud’s research shows that, on average, a single-family unit requires roughly $2,460 in maintenance costs, and the tax savings for maintenance request write-offs is about $1,337 — so there can be big savings for landlords. But TenantCloud isn’t only for landlords. It also helps tenants preserve personal information to speed up filling out rental applications. And it provides property contractors the ability to organize and file invoices.
Last decade’s Great Recession transformed the nation’s real estate landscape — and became the genesis of what was to become TenantCloud in 2014, Edgar said.
“When Texas first came out of the recession, people didn’t buy, they continued renting,” Edgar said. “(U.S.) homeownership is now at 1965 levels and dropping. This is a distinct change. Renting is now the norm.”
And, if people do buy, they’re often buying to be landlords, Edgar noted. “About 65 percent of (U.S.) landlords own less than 10 rental homes,” he said.
Tenant transaction portal
A March study by NerdWallet, a San Francisco-based company that provides research and data to consumers in areas including mortgages, insurance and credit cards, found that renting a residence is cheaper than owning one in every state and Washington, D.C.
Texas ranked 27th out of 51 in the NerdWallet report.
Using 2015 Census data, the most recent data available, company researchers found that Texas residents paid 56 percent more to own a home each month than to rent. NerdWallet study authors used the difference between the monthly median gross rent, $932, and the monthly median homeownership costs, $1,453, to determine the added cost of $521 as a percentage.
The company defined median gross rent as monthly rent plus utilities and median homeownership costs as monthly mortgage payments plus real estate taxes, insurance and utilities.
Edgar and his co-founders saw the opportunity to make things easier on small landlords who don’t have staffs to take care of typical administration tasks.
TenantCloud software supplies a portal for transactions, be they with tenants or contractors doing structure or grounds work, Edgar said. They also may create rental applications and lease agreements and store them in the cloud. The platform allows photos and videos, too.
Austin landlord Maria Gonzalez said she’s used TenantCloud for the last eight months.
“It’s the only one that’s free,” Gonzalez said. Besides that, “my favorite thing is online rent collection, so I don’t have to drive across town multiple times a month. Their maintenance request feature is also one of a kind and has saved me many hours a week by organizing it all in one.”
Tenants may create an account and bring that account wherever they rent, Edgar said.
“It’s like LinkedIn for tenants,” said Edgar, referring to the professional-networking social media site.
Private contractors also may create individual accounts on TenantCloud. The software does the bookkeeping and tracks receipts.
Stephen White, CEO of Fidelis Screening Solutions LLC and RentPrep in New York, runs companies that do background checks of tenants for landlords and job candidates for employers. He said he chose TenantCloud because it’s “the only service of its kind that gives the freedom to choose service providers inside of the platform. Giving the users the power to choose which vendor serves their needs best is forward thinking beyond what I’ve seen in the industry.”
Source: Austin Business Journal
Mike Cronin, Staff Writer