The proposition behind the property rental portal is that 30 per cent of Australians (7 million) rent, with this share creeping up to European levels where home ownership is not the sacred cow that it is here in Australia.
The reasons, says Rent founder and CEO Mark Woschnak, pertain not just to dwindling home affordability, but increased work mobility and an acceptance of renting as a lifestyle choice.
“We see renting as a percentage of the population growing massively over the next five to 10 years, to more like the 50-60 per cent rate in most other countries,’’ he says.
Given that, Rent aspires to become the next Domain or Realestate.com, albeit focused on being a one-stop portal for rental listings.
Since listing nine months ago after a $5 million raising, Rent has attracted listings from 7300 of the country’s 10,000-odd agencies, which account for half the rental market.
Rent has also attracted “thousands” of listings from private landlords, which account for the other half.
(Rent doesn’t list share accommodation, so it won’t be competing with those creepy Gumtree ads for someone to share a third of a bedroom in a high-rise inner city ghetto.)
Rent’s quarterly update this week showed unique viewings at 650,000 per month, double the rate of six months ago, with private landlord listings up 50 per cent and agent registrations up 10 per cent.
While the numbers are impressive, the rub is that advertisers have not been charged to date, the idea being to build a critical mass of listings.
The next step is to persuade the agents to part with an all-you-can-eat $200 per month for the service, while private landlords will be charged $100 per listing.
A key aspect is a tie-up with data house Veda for an add-on called RentChecker, which vets the potential renter’s credit record.
In league with listed Flexigroup’s Certigy arm, Rent has also developed a bond financing product for renters, as well as utility connection and removalist services.
While Rent generated $223,000 in the quarter from third-party advertising and premium listings, the acid test lies with acceptance of the paid-for model.
Woschnak reckons that, taking into account the add-on services, 1000 agents paying $200 a month equates to $4m-$5m of annual revenue.
He envisages a $40m-$50m a year turnover business within five years.
Rent is doing the rounds to flog a $5.5m, one-for-three rights raising, at 15c a share to fund a marketing campaign.
The stock has traded as high as 55c.
Presumably, the troubles at listed real estate agent McGrath have weighed on sentiment.
Greybeards will also recoil at the dismal listed experience of rent roll consolidator Run Corp (now owned by reformed truckie and Essendon tragic Paul Little).
Rent could do with some more flesh on the bone, but has a leading position in a market no one has bothered to tap.
We rate Rent a speculative buy.
RNT Price at posting:
14.5¢ Sentiment: Hold Disclosure: Held
