YourOwnROOM Targets to have 10K Tenants and Over $5M Revenue in the Next 3 Years
YourOwnROOM is an online managed rental company that provides attractive furnished co-living homes with end to end solution and services. We speak to the founders – Prabhat Kumar Tiwary and Sachin Joshi – on how they offer professional rental services using a technology based portal and app.
The residential rental landscape in urban India is inefficient. Single tenants face discrimination and do not have access to good quality properties. They face difficult time searching for property and are, invariably, forced to go the broker route to settle for unfavourable and inflexible rental and deposit terms and often end up compromising on locations, privacy, quality and security in the living spaces offered to them. At the same time, owners struggle to find quality tenants and manage their properties. They can’t be bothered with the hassles and costs involved in renting out property to singles. They lock up their attractive properties thereby earning zero returns on their real estate investments.
Prabhat Kumar Tiwary, a Stanford GSB alumnus and Sachin Joshi spotted this problem while managing large number of singles in their previous jobs working as senior executives in IT Services MNC. They came across a significant supply demand gap in the urban rental landscape with single tenants being the most underserved demography inspite of their emergence in the last decade. Homeowners hesitate to rent them out. They realised that both require significant hand holding throughout the cycle. Most property portal companies were focused on providing listing services but the need on the ground was end to end rental management solutions and services.
Prabhat and Sachin saw an opportunity to solve this problem using technology and operational processes and setup YourOwnROOM, an online managed rental company that provides attractive furnished co-living homes with rental services for single tenants and end to end solution and services to rent and manage co-living homes for the owners. “We get into an arrangement with the owner, rent out the individual bedrooms with common shared living and dining areas to singles and manage their rental payments and maintenance issues. We offer professional end to end management of rental services powered using a technology based portal and app,” says Tiwary.
While the tenants get a hassle-free experience of finding and living in a furnished living space, the home owners find screened tenants, obtain premium returns and get access to professional property management.
“Our business model is designed to profitably scale the business. YourOwnROOM signs MoU with the owner and seeks a maximum of 45 days to rent out the complete property. Owner ensures that the property is ready to rent and furnishes the same as per specs. YourOwnROOM lists the property on the portal and app, organises site visits and gets a tenant and manage tenancy. A tri-party service agreement is signed between owner, tenant and YourOwnROOM and 14% commission is charged on the rent,” adds Joshi.
As per the USP, YourOwnROOM provides brokerage free professional end to end to end management for tenants and owners. The tenants get access to properties close to their offices and thus cutting down travel time to 15 minutes which significantly changes their quality of life. “We charge a deposit of only 3 months where the norm is 10 months. Our process and structure is geared to provide high operational response to our customer at the time on onboarding and staying,” says Tiwary. A professional agency conducts KYC and reference check for tenants. They get continuous rent with an annual escalation.
YourOwnROOM raised its seed funding in Feb 2017 of an undisclosed amount from a group of angel investors based out of US and India. This includes Ravi Chaturvedi, Former President of P&G and Former Group Chief Executive of Jet Airways, Narasimha Murthy, Aditya Kandregula and Venkat Dasari who are senior executives in technology companies.
With infrastructure and city traffic rising, it is of paramount importance to acquire good quality inventory at the right location at an affordable price point. And this is the biggest challenge. “We are in advanced talks with some builders and investors to acquire bulk inventory at strategic locations,” says founders.
YourOwnROOM commenced their operations in April 2016 and has seen significant traction with steady month on month revenue growth. “With the current progress, we hope to close 2017-18 with over 500 tenants at an annualised exit revenue run rate of over $0.5M,” says Tiwary.
A fully functional robust technology platform, portal and mobile app has over 10K unique users on website every month to look for properties or to register their requirements.YourOwnROOM has a Hybrid App which runs on IOS & Android and has a few hundred downloads.
With a focus to expand in Bangalore and Pune, the company will gradually expand pan India by the end of the year and targets to have 10K tenants and over $5M Revenue in the next 3 years.
But the biggest learning so far has been on the need to diligently acquire the right property and the importance of execution rigor. “It is about leveraging our structure, process and technology to execute on our commitment and keeping our tenants and owners engaged,” says Joshi.
Online managed rental market for singles in urban India is huge but highly fragmented and unorganised. It is estimated to be 25% of the $13.5 B residential rental market with top 10 players having less than 10% market share. There is a steep demand for single living. There are over 1.5 million singles across the top 6 metros in India drawing salaries that can comfortably afford YourOwnROOM properties and the lifestyle that comes with it. There is abundance supply of inventory. There are 11 million vacant houses in metros 0.7 million unsold ready to move-in apartments. Demonetisation,Real Estate Regulatory Authority (RERA), emergence of budget homes and poor rental yields are disrupting this market even more like never before and encouraging property owners to get the maximum from their existing investments. “We see a significant opportunity to solve the problem of single living in urban India by directing attractive under leveraged properties to discerning singles and managing it end to end for both the owner and tenant,” feels Tiwary.
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