On the show today we talk… Rent By the Room with Frank Furman of PadSplit!
Listen on: Apple Podcasts | Stitcher | Spotify | Amazon
Show Links:
- Check PadSplit at https://www.padsplit.com/ or email Frank at Frank@PadSplit.com
- Checkout our weekly meetup here!
Show notes for Rent By the Room with Frank Furman of PadSplit!
The Vantastic Life is…
– is in Enumclaw WA!
Accelerator
Going through the tech accelerator really made the business real. Rather than a side hustle.
PadSplit is in Houston, Dallas, Jacksonville, Indinapolous, etc.
Pricing matters. Regulation matters. And there’s a little bit of market overlay. This can even change one street from another.
The landlord really matters!
How PadSplit makes money
They take a percentage, and connect the home owners with the tenants. They charge 12%, and copied from AirBnB.
Started a fund
What PadSplit does
They handle the collections. Assist in operations of the house. Rating tenants and maintenance.
What is the biggest challenge of co-housing
There is the tenant management. We can even offer tenant transfers.
How PadSplit leases work
There is a 31 day minimum, and the payments are taken weekly. Having a long term lease does no favors.
Why would a landlord want to use PadSplit
Do you want to do good and do well… by creating affordable housing, and doubling your yield.
What are the landlord responsibilities
Listing properties are easy. Handling maintenance. Which is usually a more routine visit. What are the landlord responsibilities
There is less deferred maintenance because there are so many people that little things tend to come up more often.
Start up costs for landlords
Furniture. Similar to an AirBnB.
Ideal home to PadSplit
A larger property with lots of rooms, that is hard to rent because of the number of rooms. The extra space becomes an asset. A lot of times they are transition neighborhoods.
It works as a rental but maybe a little too big.
We like being close to public transit.
What kind of investors/landlords are you working with
The traditional journey is that a landlord has a few properties that work to try PadSplit. Then the landlords start targeting the types of properties that work to maximize the model.
Why use pay by the week
We think landlords are set in their ways, only one bill to reconcile, but billing every month is easy. PadSplit is managing the non-payment of rent. Less than 2% are not paying their rent. They have an over 95% of collections rate.
Also, utilities and furniture are bundles into the rent.
Who is the ideal renter
There is no limit, but the renters are usually people that can’t afford to rent their own place. It’s usually work force housing. Or people that are moving around a lot.
We do employment verification.
What are they raising VC for?
To build the platform and launch markets. It’s actually surprisingly expensive.
It can be a high touch process to get people in the door the first time. But they really like it after starting out.
There is a pretty heavy lift on the imp limitation side. They’ve setup hundreds of houses… making furniture look good, and setting up the house right.
Top 3 things to get landlords into PadSplit
Finding the right property is the #1. Number 2 is on the regulatory side. Some places are really easy, and others can be really hard. Think HOA’s that don’t like them, or code enforcement.
Who is Pad Split patterning with
Supplies – HomeVestors
Funds
Municipalities – This has been less fruitful. They all want affordable housing, but most don’t have the will to put things in place.
Landlords – The best advocates are people that have done it, and love it. Then share it with their investor groups.
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