In our latest Member’s Spotlight Interview, we interviewed Mike Georgeson, Founder and CEO of RentalStep, a technology driven property management service created by landlords and tenants, for landlords and tenants. Mike shares his reasons behind setting up the start-up, the journey he’s been on so far, and his thoughts on the industry!
Mike, you founded the start-up RentalStep in 2016…Can you give our readers an insight into why you set up the company and the journey you’ve been on over the last 3 years?
I set up RentalStep through frustration with letting agents. I could not understand why they could charge so much to me, as a landlord, and my tenants for such shoddy service.
So, with my background of web development, I set about creating something better. Something that would help both landlords and tenants.
Working part-time on RentalStep in October of 2016 myself and Chris Jolley, our ‘techie’, somehow managed to win the the first Startups competition run by Worth Capital, where the prize was £150K equity investment.
With that investment we launched the first ever Tenant Passport service in Mid 2017 which allows tenants to move from one property to another without being referenced in a traditional way. Saves the tenant a load of money.
We then started to build our Landlord services. I have always been keen to offer landlords a great service at a reasonable, fixed price, something that sadly a lot of high street agents have been unable to do.
Last year you received an impressive £450K from government in 2 rounds of the Rental Recognition Challenge…tell us a bit about the challenge and what impact the funding has had on your business?
I had contacted Experian in 2016 and they were keen to partner with us so we could help them with their Rental Exchange service, where tenants on-time rent payments can be added to their credit file, this boosting their credit score. So we were delighted when the Treasury launched their Rent Recognition Challenge in Jan 2018, and even more delighted when we won the first and second rounds which gave us access £450K to help even more tenants have their rent recognised.
The increased funding has allowed to us to expand our team, move to a new office, create new partnerships and most importantly, to help over 10,000 tenants be able to benefit from a boost to their credit file just by paying their rent on time. And the number of tenants using this service is increasing month on month.
You launched a new landlord service earlier this year…can you tell us a bit about this – what problem are you trying to solve? And how does it differ from other solutions out in the market?
The problem with traditional letting agents is that it is in their interest to keep the two parties that each pay them, apart. And tell both parties that what they do is incredibly difficult and time consuming. It’s not.
We are the only online letting agent that truly connects Landlords with Tenants. Our bespoke communication system allows all correspondence to be stored electronically, in one place, whilst our recently launched fixed price Premium service benefits landlords by providing all the core services they need for just £35 per month.
We are currently building a system that keeps landlords updated with the latest legislation, which as any landlord will tell, can be tricky, as well as starting to use AI to help match our landlords and tenants.
Also, one of the properties I rent is an HMO so we have built RentalStep to be the best service for any landlords who manage HMOs. And we’ve succeeded.
The tenant fee ban is due to come into force on the 1st June…what are your thoughts on this and how it will impact the industry?
We have campaigned for the Tenant Fee ban but it should never have been needed. The high costs some Agents have been charging for years meant it was inevitable.
For us, the ban is a huge opportunity, and we are already seeing Landlords coming to us asking how we can help them move from their current agent. Interestingly, we are also being approached by many agents asking the same question.
But, for some in the industry it will spell disaster and I’m sure there will be many agents unable to survive. For the ones that do, there will be a lot of consolidation with many agents coming together to cut costs by closing branches.
London tends to be known as the PropTech hub, however, there are many innovative start-ups based all around the UK. How does the scene differ as a PropTech start-up based in Liverpool, can you tell us about the activity up there?
I’m not sure how it differs to London because I have never worked in the PropTech scene there but Liverpool is a vibrant City where everybody is open to looking at new ways of working. There certainly isn’t the huge start-up culture or activity up here but there is a growing number of PropTech companies, and actually we all tend to know and network with each other because there are fewer of us.
We have a different perspective on the property market up here as London is almost a different country in that respect. We look at UK-wide solutions whereas I think some London based PropTech companies look for solutions for London based issues, which sometimes do not exist in the rest of the country.
There is certainly more investment money in London but we’re only 2 hours physically away on the train so I never see that as an issue. In fact, I think not being based in the capital has helped us with our fundraising so far.
Finally, where do you think the industry is headed in the next two to five years?
The rental sector will continue to thrive and, as always, there will be threats and opportunities for landlords, tenants and RentalStep.
As mentioned above there will be a lot of consolidation of letting agents and a lot of branch closures but (and I guess I would say this) this presents a huge opportunity for fresh, agile, customer-focussed businesses to enter this market. The increased use of tech can really help deliver much better customer experiences and I hope that RentalStep can play a major part in that.
Finally, I have often likened the Letting Industry to the Travel Industry. 25 years ago you would go a high street Travel Agent to book your holiday, where an agent would show you holidays based on location and price. You really had no idea whether that hotel was going to be great or rubbish.
Fast forward 25 years and how many people reading this article can remember the last time they use a high street travel agent?
Letting Agents will follow a similar path. There will always be high street letting agents, catering for the higher value, bespoke, rental properties but most transactions will occur online.