In property management, technology is a prerequisite for growth. Short-term rental operations are extremely complex and resource-intensive. This makes it virtually impossible for companies to scale without the appropriate software to automate tasks and streamline workflows.
While there are a plethora of third-party vacation rental software products available on the market, most of them specialise in a specific area instead of providing an end-to-end solution. What’s more, large property management companies often require solutions that are tailored to their needs.
That’s why some property managers – including several of the world’s top 50 – choose to build their own technology in-house. While they may leave some specific features like channel management to third-party experts, they invest a lot of time and resources into building full-fledged property management systems, owner management platforms, mobile applications and other tools.
These software solutions are built with the intention of fuelling the company’s growth and allowing the property managers to scale their operations faster and with a smaller team than their competitors.
At the same time, property managers have realised that there’s an opportunity in reselling the software they build for themselves. Their proprietary platforms are highly specific and optimised for the rental market. So why not make them available to other, smaller players who don’t have the funds or the tech teams to build their own solutions?
This way, property managers can diversify their business models and enable other operators to grow, advancing the industry as a whole and contributing to its professionalisation. Companies who adopt their solutions can benefit significantly from platforms built by experienced industry players with a deep understanding of rental operations.
Let’s take a look at some examples of tech-enabled property management companies who have made a move into the realm of B2B software.
Releasing proprietary technology as a white-labelled solution
“There weren’t any solutions tailored for property managers looking to scale from 50 properties into the hundreds or thousands of properties.”
Alex Limpert, Co-Founder and CEO at Guest Ready
Number 22 on our list of the world’s 50 largest property managers, GuestReady operates more than 2,500 short-term rental properties in London and other major cities. The company prides itself on helping property owners increase their profits by using technology to enhance their operations.
Having partnered with Rentals United, GuestReady had its channel management needs covered. But they decided to build their own solutions for everything that comes after the booking.
“From day one, our overarching filter was ‘tools that make our life easier’, without reinventing the wheel. Channel managers, for example, were already available in 2016. Beyond that, there weren’t any solutions tailored for property managers looking to scale from 50 properties into the hundreds or thousands of properties so we decided to build them ourselves to unlock scale,” says Alex Limpert, Co-Founder and CEO at Guest Ready.
The company’s product team of 10 people built a property management system that handles all properties, bookings, messaging, and other internal operations. They also developed a host dashboard where GuestReady interacts with property owners, as well as an iOS and Android app for on-the-ground operations staff and service providers.
Seeing how these solutions were helping the business grow, GuestReady started to have conversations with other, smaller operators who were interested in using their technology.
“We are active in multiple key cities and did not want to spread ourselves too thin on smaller markets where local heroes already were doing a great job. These local players are often limited in their growth because of the lack of technology, which they don’t have the capital to develop. Thus, we naturally started to have conversations and eventually support several third-party property managers with our white-labelled solutions,” says Alex.
As a solution developed by and for property managers, GuestReady’s white-labelled software started to gain traction. Today, several operators benefit from its state-of-the-art technology to scale their operations, while focusing on what they’re best at: being an expert in the local market.
Now, you can be a part of GuestReady’s success! The company is currently running a crowdfunding campaign on Seedrs. After hitting its original target in less than 24 hours, GuestReady is on the lookout for more investors to join its journey. The campaign ends on December 11th, 2020 – don’t miss out!
Watch our interview with GuestReady’s CEO on the Secret Sauce Podcast
Using property management as a testing ground for software
“To really inform our software development we needed to have deep experience of front-line operations at scale.”
Fred Lerche-Lerchenborg, CEO at Lavanda
London-based Lavanda chose a different path than GuestReady. Starting out as a property management company in 2014, Lavanda pivoted to selling software just three years later. In fact, according to Lavanda’s CEO Fred Lerche-Lerchenborg, this was their vision all along.
“We simply believed that in order to really inform our software development we needed to have deep experience of front-line operations at scale,” he says.
Diving deep into property management allowed them to gain experience in the rental market. And, they were able to build authority before tackling the real opportunity: the fast-growing demand for B2B software. Lavanda pinpointed this need in the institutional multi-family and student accommodation spaces early on.
“Both these sectors were looking to tap into short and medium-term rental demand in order to solve core challenges faced by their businesses,” says Fred.
These operators had a wide range of goals, from monetising vacant units to leasing up new buildings and enabling long-term residents to rent their rooms out on Airbnb. Once Lavanda had built its tech stack and tested it on its own business, the company had the chance to start solving these problems for its target markets.
“We had a deep understanding of the unit economics underpinning short-term rental property management, the operational challenges faced by property managers, and the pros and cons of the various solutions available on the market,” says Fred. “Having achieved the milestones we’d set out to achieve, we flicked the switch and set our sights on becoming the world’s leading ‘omnichannel’ PMS.”
Now, Lavanda enables institutional real estate operators and high-growth property managers to mix short-, medium- and long-term strategies seamlessly via a single unified platform.
They provide a variety of solutions ranging from channel management to custom websites, multi-unit distribution, workflow automation, task management, CRM and business analytics. The users of their system benefit from it in different ways, including boosting net operating income, protecting assets against uncertainty and saving time and resources by automating operations.
Lavanda currently has a team of 15 software engineers and product managers. And, they’re expecting the team to double in size over the next 12 months.
Watch our interview with Lavanda’s CEO on the Secret Sauce Podcast
Expanding into asset management
“Managing units ourselves has helped our platform evolve and transition from just a short-term rental solution and into a full asset management platform.”
Emir Dukic, Founder and CEO at Rabbu
Similarly to Lavanda, Rabbu started its journey as a property management company. The startup was founded in 2017 in Charlotte, North Carolina with the intention of moving into software as soon as the team understood the challenges of operations management.
“We like to live the use cases we solve,” says Emir Dukic, Founder and CEO at Rabbu. “We focused first on understanding the pain points of the property investors because we found the relationships between the managers and owners weren’t always aligned. The disconnect created issues and limitations for both parties.”
This led Emir and his team to build a solution that allows property investors to procure their property by understanding its revenue potential. Once this is taken care of, Rabbu then provides operators with the tools to manage and distribute properties – with the help of the Rentals United channel manager.
Furthermore, Rabbu’s IoT platform automates the property itself including controlling tenant access, scheduling turnovers and maintenance, and capturing early and late check-ins and check-outs. It also provides the property investor with energy cost reduction and acts as an alarm system.
And finally, Rabbu’s financial solutions provide advanced trust accounting, reporting and tax implementation measures, as well as giving owners insight into the performance of their portfolio.
“Managing units ourselves has helped our platform evolve and transition from just a short-term rental solution and into a full asset management platform. We believe that rental homes shouldn’t have a singular revenue strategy. What the pandemic has proven is a need for flexible rental options ranging from days to weeks to months to years,” Emir says, echoing our views expressed in the Next Business Model.
Rabbu’s small tech team of two engineers has taken on a grand challenge: to help property managers and operators create businesses that align interests, unlock the full revenue potential of homes and do this through highly scalable operations.
The company still manages its own properties but focuses on identifying revenue potential and maximising profits for companies with 10+ units. As a startup, Rabbu is working on cementing its future in the market – and that includes funding. “We are actively looking at opportunities to set ourselves up for growth,” says Emir.
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