MyNewPlace is a new place to search for apartment listings on the Web, and its creator says the site will offer one of the largest online collections of rental units – an estimated 6 million when it launches today.
The new site represents a Web 2.0-inspired minimalist approach to rental listings: a simple, straightforward main page that allows consumers to enter in an address and city, state or zip code to view property listings. There is not a single ad on the page, and there is no selling of other services such as moving vans or rental insurance.
The search results pages are similarly streamlined, with basic property listings information and small photos in the middle of the screen, search refinement tools to the left, and a Google Maps-based display of property locations to the right. Property-searches can trim down the list of available properties by selecting number of bedrooms and bathrooms, price ranges, picking a specific pet policy, and searching for specific amenities such as laundry facilities, exercise facilities, parking spots, extra storage, and pools.
Within the past year several property-search sites have launched with a similar aim to simplify the process and improve the user experience.
For additional information about each property, such as floor plans and unit availability, users must complete a free registration process. Registered users can also save their property searches, and those who locate a unit using the site are eligible to receive a $100 rebate when they move in.
John Helm, founder and CEO of MyNewPlace, is no stranger to the apartment-search scene. He earlier founded AllApartments/SpringStreet, a rental and relocation site that sold to Homestore in 1999 and was re-branded as RentNet.com. He has also served as chief financial officer and led business development at Marcus & Millichap Real Estate Investment Brokerage Co. and also has worked in sales for Coldwell Banker Commercial Real Estate Services.
Helm said he returned to the apartment-search space because he saw new opportunities to integrate emerging technologies. “I watched the growing level of sophistication amongst the owners and managers as well as the growing capabilities of what you could do on the Internet. It looked to us that both the clients were being underserved as well as the consumers,” he said.
Some big industry players offered encouragement and financing to develop the new site. Helm said that large real estate investment trusts and building developers and managers have supported the effort, including Essex Property Trust, United Dominion Realty Trust, Lane Co. and Continental American Properties.
It’s free to list properties on MyNewPlace, and apartment owners pay a fee when renters locate a unit using the Web site and sign a lease. Helm said the company charges a base rate of $375 to apartment companies for successful lease transactions, which includes compensation for the $100 rebate that MyNewPlace sends to renters. Large owners can get a discount on that rate based on the volume of units, he said. Transparency is key to the business model, Helm said, and the site spells out its policies through links on its main page.
Initially the company has targeted the large apartment companies, Helm said, with plans to reach out to smaller players as the site evolves. There are an estimated 11 million to 12 million single-unit rentals in the nation, he said. “It is a big chunk of the rental stock but it has a very low turnover. It’s the part of the market that’s hardest to get at. We will be reaching out to those sorts of owners once we sign up all of the big properties,” Helm said.
According to U.S. Census Bureau and industry statistics, there are an estimated 36 million rental units, with about 6 million units in complexes with 50 or more units apiece, and about 19 million units consisting of two-unit to 49-unit complexes. There are about 12 million leases per year. “One-third of the U.S. population rents,” Helm said.
According to a survey conducted for MyNewPlace, about 66 percent of renters begin their apartment search on the Internet, while 17 percent start with a newspaper and 11 percent start with apartment magazines.
Kevin Thompson, senior director of marketing for Avalon Bay Communities, which owns or holds interest in about 158 apartment communities with 46,000 apartment units, said Internet marketing is increasingly important for the industry.
Avalon Bay Communities has moved away from traditional print advertising and is increasingly using online marketing to drive consumers to its properties, he said. The company uses unique toll-free phone numbers to track responses to various types of ads, he said. In 2003, about 52 percent of all calls came from ads in printed apartment guides, 29.8 percent came from the Internet and 16 percent were from newspaper ads, he said. In 2004, calls from Internet ads soared to 54.6 percent of the total, and in 2005 the Internet accounted for 63.8 percent of the calls, he said.
Also, he said, the company found that about 24 percent of leases in 2003 were related to its property listings on the Internet, and that has since increased to about 40 percent.
Thompson said his company works with a variety of apartment-listing sites, such as RentNet.com and Rent.com, and is also listing properties at MyNewPlace.com. “We see MyNewPlace as one new brick in the foundation of a very broad Internet strategy we have. We are really changing the focus on how we generate and prospect leads on the Internet vs. other traditional media. For us we look at what is the most cost effective lead source.”
Rent.com also uses a pay-per-performance model for leads that it brings to property owners, while some other apartment-search sites charge a subscription price to post listings. The ability for apartment owners to immediately include or remove individual apartment communities from being posted at the MyNewPlace site is attractive because companies can make quick decisions in marketing their inventories, he said.
“The Internet is the perfect medium for search,” he also said, though apartment-search sites seem to have lagged a bit behind the for-sale real estate search sites. “(Those sites) are probably a few years ahead of the for-rent market. The industry is shifting out toward something new and different.”
Thompson said Helm is one of the “forefathers in Internet listing services – I think he understands the business and he understands the industry.”
While some apartment-search sites are loaded with pitches for other services, such as dating and moving services, Helm said MyNewPlace focused on the primary search. Other sites tend to have “a lot of banner advertising, a lot of promotion going on, a lot of stuff that is unrelated to finding an apartment, and we don’t like that and consumer research shows that when they are on an apartment site they want to find an apartment and that’s it,” he said.
“There are a lot of parallels between what we’re doing and what the new (for-sale) home sites are doing.”
To generate consumer traffic, Helm said the goal is to “prime the pump with advertising,” and then to supplement that traffic with online paid-search ads. “The best way to get traffic in this industry is classic keyword advertising,” he said. “Our hope is – we’ve got such a compelling user experience that over time it will drive a lot of word of mouth traffic.”
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