Episode 22: The newfound transparency in user-centric leasing ft. Zumper
Think about the top 10 sites you visit every week. They probably have one thing in common: accurate, authentic, quality information. Tech companies like Google and Amazon have understood the value of data and putting the needs of the user first for years. But as with many things in real estate, we’re still seeing these kinds of trends change slowly in leasing. In this episode, we talk to Anthemos Georgiades, CEO and Founder, and Allison Nesbitt, Director of National Accounts, from rental marketplace Zumper about transparency and speed in leasing—and where they’re seeing the largest leaps kicking off 2021. Subscribe: Soundcloud | Spotify | Stitcher | TuneIn The following transcript has been edited for brevity and clarity. Why has it taken so long for the real estate industry to give renters more transparency in leasing? Anthemos: I think there are two things we’re seeing. One is just the dollars they’re paying in residential real estate are just enormous. Think about when Uber or Instacart launched. You’re dealing with smaller transactions — a $10 ride or a $40 grocery check. With apartment rentals in the multi-family industry, you’re dealing with a $40,000, $50,000, $60,000, $70,000 annual transaction. That’s a lot. And so, I think when you look at risk aversion, it’s naturally a little higher in our industry than it is in others. So, I think that’s the first reason. The ticket item is so much higher. Tech can’t just snap its fingers and change everything overnight, because things were working before. The second reason is the way companies that came before us approached it. I don’t know if they ever truly tried to understand both sides of the market. A lot of the industry came from the classified sections of newspapers, where they were just used to monetizing landlords who paid to advertise. Then they just brought that online. New companies like Zumper don’t start from that position. We start by asking how we can help our users. The average user on the renter side is a 28-year-old woman pursuing her career. Then on the landlord side, we have both very large multi-family clients and then we have the mom-and-pop landlords. They’re all completely different constituents and they have to be treated differently. And so, I believe the modern technology companies like Zumper have to build product-centric technology with empathy for users, not necessarily empathy for ad dollars out of the gate. And I think those two reasons are why we haven’t seen these dramatic shifts in our industry yet, although they are coming. Tell us how Zumper does things differently compared to other listing sites and syndication. Anthemos: At the peak of leasing season this year, for example, we’ll have 20 million visits a month and 10 million users a month. Because we’re built for the user, 80 percent of those visits will be on mobile. And where Zumper got big very quickly was on mobile. When people think of mobile, apps are the first thing they think of. But a lot of people access us through mobile web. And it’s the last product people develop for. But it’s actually really important to build a great experience on mobile web. Being based in Silicon Valley, it’s an obvious thing to say, but you know what? We all spend all day at our desks. And it’s very easy to forget that just because we spend all day looking at a big screen, that isn’t necessarily where users spend their days looking for apartments. So, our median user is that 28-year-old woman. We call her Jennifer. She is looking on her phone. And I think the previous platforms had not been built for mobile very well. They are still desktop web first, and we are the exact other way around. So, I think first, Zumper is built mobile-first. We’re the largest private player because we’re mobile-heavy. And that was a big differentiator when we launched eight years ago. The second thing that differentiates Zumper is our end-game mission. Zumper’s mission is to make renting an apartment as easy as booking a hotel. With that mission, lead gen and sending quality leads to CRM, whether it’s Buildium or direct CRMs to our clients, is huge. It’s our bread and butter. But that’s not where we’re going to end. We want to end with full-on e-commerce for 12-month-plus apartment rentals, where you tap two buttons and you can close in an on-site tour. And we want to deliver that to both the small mom-and-pop landlords, the mid-market, and also the multi-family. That is a very different vision from the current ILS space. And that’s where Zumper is really focused to bring significantly higher value to our property manager and landlord clients. Where do you think our industry will go? Anthemos: It’s hard to imagine that you’re always going to send an email and it’s going to dump into a CRM, and then you’re going to have to get into an online exchange or get on the phone. There has to be a way to build a better matching mechanism. Like a college application system, where you apply once or prescreen once and then you can fit everything that comes with your qualifications. I think that’s where our industry will go. What does the future of leasing look like? “Hi Alexa, I want to find an apartment in Austin, TX?” Anthemos: We’re halfway there, now. Zumper does a bunch of stuff with Siri, where you can talk to Siri and Siri will find you an apartment through Zumper. I think the ultimate thing we’re building toward is push button, get apartment. There’s no reason our industry shouldn’t work like the hospitality industry in scale. We’re not saying communities should accept people unscreened. They absolutely will be prescreened, but using objecting APIs as a base line to tell communities which renters are safe tenants that they should use, using data. That’s the future. We have to cut the 30 to 45 days to close vacancies and technology is ready to do that. So, now what we need is for our industry to take those leaps of faith. There is a faster way of doing this. The hotel industry has obviously moved toward it, and we will be next. Will that encourage leases to go month-to-month, stay annual, or go longer? Anthemos: I think we see our communities becoming more flexible. I think there’s a huge opportunity to capture people who might want to try cities for short periods of time. But I think the majority of the market is still the 12-month lease. It’s so dominant as a percentage of U.S. leasing, that it is absolutely the core thing. Because there are advantages and network effects to cities and areas, where you build relationships, you build friends. If you have children, they go to school. So, the vast majority of people will still want those 12-month leases. Leasing is happening much faster since the onset of the pandemic. Are you seeing any other trends? Anthemos: Yes. Let me give you an example. We had previously had 3D tours and virtual reality tours on a smattering of listings a year ago, and it’s gone from a smattering to being really essential during the pandemic. And just because in the future, post-vaccine, people will obviously be able to tour things in person, I think the consumer will demand a 3D tour, or at least a video, before even going to see it. So, using modern media, this has been the breakout year. Now, our listings with the most viewings all have a 3D tour, or users can even see it on a VR set, if they have one at home. That is the beginning of the future. The flirting period is over. It is becoming an expectation of every community. Name the top mistake that you see leasing agents making in putting together and promoting their listings. Allison: The top mistake we see is that they do not keep their listings fresh, updated and optimized to their full potential. There are so many tools, like virtual tours and videos, that we recommend property managers use to showcase their properties. We actually launched a webinar on this topic. We recommend showcasing photos of interiors by uploading them first. Because we’re in a global pandemic, the space that people have is going to be important. We see those types of things yielding the highest clickthrough rates and lead rates. In our most recent renter survey, we found that search volume for communities with outdoor spaces and other similar amenities have skyrocketed over the last year. Searches for outdoor space on the Zumper platform grew 143% year-over-year, while searches for balconies increased by 87% and gardens by 86%. Obviously, people are dying to get out of the house while still staying safe. So, take the time to understand your ideal resident profile and your unique selling features. What types of listings and listing elements have had the most success recently? Allison: Definitely properties that are getting creative with virtual touring. In a global pandemic where most people are hesitant to visit communities of interest and most leasing offices cannot have a lot of strangers in and out of the office, being able to check out the community virtually is a must. We have seen many in the industry respond in some incredibly creative ways. There are a ton of resources in the industry to help properties showcase their properties virtually. Matterport, our 3D tour partner, shared that virtual tour leads are 95% more likely to sign a lease. When the pandemic hit, our engineers worked very quickly to enable the ability to upload virtual and 3D tours, we’ve added almost 40,000 virtual tours this last year. We highly recommend that every property manager make it their goal to have a video or virtual tour strategy. And it doesn’t have to take a lot of time or money to achieve your goal. Anytime a unit is made ready, have one of your rock star leasing agents walk the apartment with their iPhone and shoot a tour just like they would be showing the apartment. Just make sure to take the video in landscape view if you’ll be uploading those virtual tours to YouTube or Vimeo for hosting. Many of our clients are building efficiencies in their leasing process by getting creative. Remember to tag your videos with the unit number and floorplan type so you can utilize it for future use. How many times do you have a prospect who wants to lease but wants to see the actual unit? If you have video already recorded, you can show the unit even if it’s not vacant. Build a library of these videos and your future selves will thank you. The same goes for 3D tours and 360 tours. Shoot as much as you can and make sure it lives on all of your advertising platforms, including your property website, social media, Google My Business, other local listings sites, and of course, Zumper. Do you have any other specific data to back that up based on recent renter preferences? Allison: Especially because of the pandemic, 56% of renters say the most important part of their apartment search is photo and video quality. In a recent renter survey, we found that renters will lease without physically seeing their apartment if there are virtual tours for them to explore and everyone stays safe. Renters are actually more trusting of listings that have multiple photos, even better if you can showcase actual vacant units. They want to know exactly what to expect. Floorplan images, 3D Tours and video are a great way to showcase what it’s like to live at your community. Leasing is all about building trust. What do property managers need to do to create those types of next-level listings beyond syndication? Anthemos: It’s a partnership of all three sides of the triangle. You’ve got the communities. You’ve got the search portals that have the audience, like Zumper. And then you have someone in the middle, who have the experts, the hardware that are creating brilliant 3D and videos. Both the communities and the ILSs like Zumper have to take the leap of faith together. Whether we co-invest in the technology, or we figure out a way that it’s a win-win. This is the future. The ILS will benefit because we’ll just have richer media. The community will benefit for all the reasons that Allison explained. And, obviously the Matterports of the world are desperate to work with both sides. So, I think before now it was this luxury, this nice-to-have, and it’s now necessary. So, to make it work on all three sides of the triangle is a leap of faith to come together and power the technology. Zumper has done a lot of work specifically with Matterport and with communities to package something that is a win-win, where Zumper pays for some of it, the communities pay for some of it and we wrap it with our relationships with the communities. And then Matterport has given us something great to work with. Do you have any success stories that you could share for those using Zumper? Allison: At Zumper, we’re laser focused on the health of our listings and delivering high-quality, rent-ready renters directly to properties. We’re constantly optimizing the renter experience. One of the major things we did in 2020 is we started to create more friction for our renters before they could contact a property. We found that properties were getting flooded with leads that maybe weren’t quite as serious or weren’t far enough down their process to be ready to tour and lease. So, we are now requiring more of our renters when they want to reach out to communities of interest. They have to put in their full name, phone number, email address, move-in date and the floorplan they’re interested in. We’re also validating phone numbers, and we don’t allow a prospect to fill out a form without a valid area code. And, since 80% of our traffic originates on a mobile device, there’s always the risk for prospects to get that “fat finger syndrome” and make a mistake when typing. So, we’re prompting prospects to correct their email address if they accidentally type .con vs. .com, for instance. So, we’re just turning the gears a little bit to make sure we’re refining the leads we’re sending through. As I mentioned, we added the ability for our property managers to upload virtual tours, 3D walk-through tours and video to their listings for free. That way, once a renter is ready to reach out to properties, they are highly informed. Requiring rich lead data, providing all the necessary information about a property upfront and allowing renters to schedule or suggest a tour time, has led to great success for our clients. We did a case study with a large multifamily ownership group. In a 6-month period, after making all of these changes, we recorded a 300% increase in lead-to-lease conversion, so we know that it’s working. We are going to continue to double down on lead capture quality in the near future with things like user profiles, in-app messaging and property matching technology. So, we’re just going to continue to double down on lead quality. Because then once the properties call a lead, they have so much information already about that person that the conversation is already three steps ahead. Do you have any other advice for property managers? Allison: My advice would be if you do have a phone number for a prospect, most certainly call them. You’d be surprised how many properties are so used to just emailing a template, oh, but they didn’t respond. Well, give them a reason to respond to you. Have a conversation. Make that personal connection. Invite them into the property or walk them through the apartment via Facetime. There’s a leap that needs to be taken on the property side that make sure that they’re making those personal connections, because that’s what it’s all about. To learn more about Zumper, visit their website.