Like startups involved in artificial intelligence, real estate-focused new technology businesses also have opportunities to showcase their strengths at a global event, a fact that a Hong Kong firm will readily attest.
SnapFlat, an online rental platform founded in 2017, has proceeded into the finale in a startup competition held by MIPIM, a global property event to be hosted in Cannes, France next March.
The company achieved the breakthrough after it recently won the Hong Kong qualifying round of the MIPIM Startup Competition and emerged as a finalist, along with two other startup finalists from Hong Kong, the Hong Kong Economic Journal reports.
The three Hong Kong finalists will compete for the top honors at the March 2018 event with three other finalists from New York and another three from London.
Contestants have to provide real estate industries with business solutions, through innovative business models, technologies, services and experiences, to improve the real estate ecosystem.
SnapFlat founders Jean-Baptiste Bellier and Eric Satzger, both from France, came to work in Hong Kong about four to five years ago. Searching for rental accommodation, they found that they had to pay their property agents a commission equivalent to about half of a month’s rent.
This got them thinking about the tenant-broker arrangements and exploring ways under which a tenant can avoid commission payments to agents.
As they thought about a business plan, an idea emerged, leading to the creation of SnapFlat.
New business model
SnapFlat operates differently from other rental platforms, as it allows its users, namely the tenants, to skip paying broker commissions.
Bellier noted that prospective new tenants were often unable to take a look at their apartments, as they had to wait until the old tenants actually moved out. Amid this situation, apartments are, on average, left idle for a month before they are rented out to a new tenant.
To resolve the issue, SnapFlat deploys a “rent reward” incentive, offering a bonus to tenants who recommend their units to others or allow people to visit their place before they move out.
Another tactic the online platform resorts to is placing rental ads for landlords in multiple locations, so that potential tenants can hook up their ads and then make appointments for visits to the units.
After a unit is successfully leased out, licensed real estate agents working for the platform will handle the legal paperwork for the landlord and the new tenant.
When the deal is done, the old tenant can receive a reward of 15 percent of a month’s rent.
The landlord, meanwhile, would pay the real estate agent a commission equal to half a month’s rent.
Vacancy rate falls sharply
The vacancy rate of the units leased out through SnapFlat, according to Bellier, slides from an average of a month to a day. As the tenants need not pay the agent a commission, it is a win-win situation for both the landlord and the tenant.
Since launching its operations at the beginning of this year, SnapFlat has assisted in leasing out several hundred units. The startup is focused on developing the Hong Kong market for now, with potential forays elsewhere likely to come only later.
This article appeared in the Hong Kong Economic Journal on Dec 12
Translation by Jonathan Chong with additional reporting
[Chinese version 中文版]
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