1. What does Rented.com do?
Rented.com pays homeowners and landlords a fixed rent directly, on behalf of short-term and vacation property managers.
2. Why do we do it?
Homeowners love (and landlords require) fixed rent payments for short-term renting, because they can still earn more than long-term renting, while enjoying the benefits of stable monthly payments.
3. Why should a PM use fixed rent contracts?
Providing fixed rent payments to an owner is the ultimate signal of confidence in your abilities as a manager, and is an effective way to get first-time rental owners to add their property to your portfolio. Since fixed rent payments are simple to explain to owners, owners say yes to fixed rent contracts five times more than commission contracts.
4. Why wouldn't the PM do it him/herself?
Property managers can't sign an unlimited number of fixed rent leases, as they generally don't have the cash or risk tolerance required to do so without putting a lot at stake. And, since property managers generally only operate in a handful of markets, they may not have the most data to determine how much revenue a property can generate.
Rented.com can sign unlimited leases on a property manager's behalf, because that is the reason we exist. And, since we look at hundreds of properties in dozens of markets every week, we compile the best data in the industry to evaluate the property's potential, and use that to generate an offer that works for everyone."
5. How does it work?
- Send us a property. Pick a property or owner, and submit the property details to Rented.com using our short online form
- We'll give you an offer. Rented.com will run an appraisal on the property and provide you with our revenue projection, along with a recommended pre-approved offer
- Manage the property. If the owner accepts, they sign our contract. You are now that property's manager. Rented.com will pay a fixed amount to the owner every month, and in turn, we'll receive the owner's portion of the rental revenue
- Commission top-up. At the end of the contract, Rented.com pays the manager an additional bonus commission if the property outperformed, or collects a commission rebate if the property had a tough year
- Do it again. If everyone is on board, the contract can be renewed for a year or longer.
6. How much does it cost?
Rented Capital offers cost nothing - we don't charge managers anything to sign a property with our funding
We earn money as the property is booked, after the manager takes their commission - just like an owner
If earnings exceed the target, we pay managers an industry-leading bonus on top of their base commission
To protect us from loss, our property managers partially rebate their commissions to make up the difference if revenue falls below the minimum. We never ask managers to rebate anything above their commission - it's the same as if you never managed the property at all
Rented.com waives the commission rebate for managers who provide us with property performance data on their full portfolio
7. Is it risky? / Is it a loan?
Rented Capital is not a loan, factoring agreement, cash advance, or line of credit. As a result, managers never have to come out of pocket to pay Rented.com. We don't touch any fees or non-commission revenue you collect over the period - we only ask that you share your commission with us if we sustain a loss.
Rented.com invests in the rental potential of the property, and trusts in our partner managers to make it perform."
8. How are the Minimum and the Target determined?
"Rented.com sets property revenue targets based on the amount of capital it invests on the Manager's behalf. Rented.com shares these targets with Managers in detail during the offer process, so you know exactly how much you need the property to do.
The minimum is the revenue needed for Rented.com to earn back its investment. That's it - no more, no less. As long as the property hits the minimum, you keep all of the commission you earned, and Rented.com keeps no more than it started with.
The target is the revenue at which Rented.com begins paying you its industry-leading bonus, on top of the base commission. Rented.com uses a standard target on all deals of 18% above the minimum. This is where Rented.com earns its money - we believe that we should only win when our managers do, too.
9. Why would Rented.com accept earning no money on its investment?
Our belief is that some of our investments will earn nothing, and that even a few of them will lose money for us; but that when taken as a whole portfolio, more of our investments will earn a healthy return for both the manager, and for Rented.com than will be underperformers. We think that our data, our partnership approach with managers, and our global coverage can make us more successful. This means that we can tolerate those "zero return" and "loss-making" properties, as long as there are enough good ones to offset them. In cases where we make no money, we chalk it up as a "Cost of Learning" in a new market, and work with the property manager to find new properties that can generate revenue for both of us.
10. How credible is Rented.com? Why haven't I heard of you before?
Rented.com has been involved in the property management space since 2012. Rented.com is backed by a venture capital fund with a strong track record of producing billion-dollar businesses. Rented Capital has secured rights to fund approximately $125 million dollars worth of property leases, which we would like to complete by the end of 2018. Rented.com has funded millions of dollars of fixed rent contracts and works with some of the largest names in vacation rentals, such as Vacasa, TurnKey, and Oasis Collections, to help them grow their portfolios and earn more from their properties.
11. How many properties does Rented.com currently back?
Currently, Rented.com has committed over $5 million across 200 individual properties in the United States, and clusters in test International markets such as South Africa, Belize, Mexico, Ireland, and Costa Rica. Rented.com backs one of the largest sets of vacation rental inventory managed by a distributed network of local managers in the world.
12. What properties qualify for offers?
Almost any vacant, ready-to-rent property in a market with good rental demand will qualify for a Rented Capital offer. We don't have any special requirements around the type (house, townhome, condo) or style (whether simple or ultra-luxury) of the rental. Properties that are unfurnished or do not have connected utilities must have those in place prior to the start of a Rented.com contract. As an example of our range, we have funded monthly rent amounts between $1,500 (a smaller urban market 2-bedroom) and $15,000 per month (a major urban market 4-bedroom modern mansion with pool and ocean views).
13. Does Rented.com waive the Commission Rebate requirement for any deals?
Yes. Rented.com can waive the Commission Rebate requirement and associated bonus opportunity for Managers who desire that. To qualify, Managers must provide actual historical performance of at least 3 properties that they manage and can provide proof of bookings and income. Manager can do so on an opportunity-by-opportunity basis, or can become a Rented.com Portfolio Data Partner. Rented.com Portfolio Data Partners share a minimum of 2 years of bookings data on each property in their portfolio using a data export from their property management system, and provide rolling quarterly updates of the data. Please note that the waiver is valid only in those markets where the manager currently operates.
14. What if the owner doesn't accept the offer?
Managers are always free to offer a direct commission-based offer to the owner. In fact, presenting a fixed rent offer often helps build owner confidence in managers, resulting in more owners saying "Yes" to management agreements, regardless of offer type. Furthermore, you can always resubmit that home again in future for a quick review and new 7-day offer.
15. I want to offer Rented Capital fixed offers to every owner I meet. How can I do this?
Once you're familiar with the information Rented.com needs to generate an offer, collect it in a standard way for each property you'd like to manage. (Because each property is unique, we conduct an appraisal for every offer we extend.) Submit those properties to us, and we'll provide offers back to you.