Nick Dazé, the co-founder and chief executive of the new Los Angeles-based apartment rental services company PocketList, likes to say that his company is the first one to put the renter at the core of the platform.
The company Dazé has built with co-founder Julian Vergel de Dios, has, in fact, flipped the traditional script of relying on landlords and property managers to source information about available rentals and is relying on renters to provide information about the apartments they're in... and the apartments where they'd like to be.
PocketList started as an experiment born out of a lot of trial and error, according to Dazé, but it was around the initial revelation that "renters typically know they're going to be moving way ahead of time."
The service, which is available as an app and online, was a business nearly four years in the making. Initially Dazé and Vergel de Dios built a service called Block. "The hypothesis with Block was that a big pain point for renters was communication between people looking for apartments together," Dazé said. "We made a tool that was well designed and well built … it was a cross between Slack and Microsoft Excel, but specifically for renters. The biggest problem was that it didn’t have a good business model."
What started as Block eventually morphed into PocketList, and the two Los Angeles-based founders quickly took the app to market with little fanfare in November. Growing initially by word of mouth, the service allows for an easy sign-up, where renters fill out a brief description of their apartment -- basically letting the community know what it's like and that it will soon be on the market -- and then can search for other apartments in areas in which they're interested.
Rentals typically sit vacant for an average of 26 days every time they turn over, according to PocketList’s internal data. That delay costs landlords as much as $43 billion and puts pressure on supply-constrained housing markets, the company said. But using PocketList, renters can leave a place more quickly and owners reduce to perhaps one week the time an apartment stands empty. Currently, the average unit on PocketList is rented 67 days before the landlord is given notice, and 97 days before the unit appears on other listing sites, the company said in a statement.
For renters, the network provides information about apartments that will be available on the market and a way to query current occupants about potential units. Interested renters can also reach out directly to landlords and property managers via the PocketList app to indicate that they'd be interested in looking at a place. To ensure security, no contact information is shared with a property manager until a renter submits an application, and last names and images are hidden until the renter applies for an apartment.
On the other side of the equation, landlords and property managers are able to claim properties for free and see feedback from renters about their buildings -- and the thoughts renters have of other properties in their area. They also get earlier access to potential tenants once a previous tenant gives notice.
The next features on the product roadmap include descriptions of areas, which give potential renters the option to select for the kinds of neighborhood features they want, and more tools for landlords, like direct application submissions, renter resumes and other landlord response tools.
The company's rental marketplace already has tens of thousands of units in Los Angeles described on its platform by the renters themselves, and will be expanding to San Francisco and San Diego later this year, with plans to move into Seattle in 2021 and New York and Chicago later that same year.
Backing the company's expansion plans and development is a $2.8 million seed round, which came from David Sacks' investment firm, Craft ventures, along with Abstract VC, Wonder Ventures and Zillow co-founder and recent Los Angeles returnee, Spencer Rascoff. Other, undisclosed, angel investors also participated in the round.
Still pre-revenue, PocketList plans to make money off of charging property managers and landlords for leads on likely renters for their apartments. Landlords can send outbound messages to potential renters that have expressed interest in a property, said Dazé, of one of the company's planned new services.
“Bringing transparency to real estate has been a nearly 20-year process, and the apartment market is only just getting there,” said Rascoff, PocketList investor and founder of dot.LA and Zillow. “PocketList takes transparency to the next level, bringing exclusive ‘pre-market’ inventory into the light, and it’s no surprise that renters have flocked to the service.”
Renters can download the PocketList app for free, rate their current apartment and get access to the listings available on the app. Meanwhile, property managers and landlords have access to a pro version, which has all of the outreach, management and overview features that they'd want, the company said.
“Given the way the current rental market is set up, there’s almost always a gap between when a renter ‘needs to find a place’ and actually ‘rents a place,' ” continued Dazé. “PocketList breaks the cycle and gets people into homes they love earlier than ever before.”