Digitizing the Real Estate Rental Journey — Our Plus Products
For those of you who don’t live in a big German city: It is quite a hassle (some say impossible) to find a nice and affordable place to live. For those who live in a big German city: You know what I am talking about.
Renting an apartment is not easy. Or smooth. Or enjoyable. Or fun. Quite the opposite.
There are lots of reasons for that. Of course, too much demand (people) and too little supply (apartments) don’t make a good outcome. But the problem goes deeper. When renting an apartment, you feel like time traveling back to the 1980s. All offline, all paper, all like 40 years ago. You try to make an appointment with the owner or agent, you prepare lots of documents, you print and copy sheets of paper, you hand over your personal financial information (salary and more) to a complete stranger and don’t know what will happen afterwards. You keep your fingers crossed that in the end everything will be ok.
Even if you are lucky and get the apartment, the ‘fun’ continues: You send paper back and forth with your landlord, you go to a bank to put lots of money into a deposit account, you sign a rental contract and put it somewhere in a folder, etc.
Sounds familiar to you, right?
Well, good news is that things have changed. Or started to change.
Two years ago, we at ImmoScout24 started to create our so-called ‘Plus’ product for tenants. These are paid membership products where a potential tenant gets to enjoy an almost completely digital process.
- You get additional information during the search phase like a matching to your potential landlord. Scheduling your viewing appointments is digital. Property viewing is digital (in case you want).
- Your application documents are digital. And safe — as you control to whom you send them.
- Processing your deposit is digital (and you won’t have to pay the full deposit).
- Last but not least, your rental contract is digital - your landlord can send it to you via ImmoScout24 including digital signature.
Yes, you still have to move physically. But we make at least large parts of the rental journey easy, smooth and even comfortable for the tenant (and by the way, also for the landlord). It starts with search, continues with application, and does not end with moving in — but goes into the living phase — with services like a locksmith service, a check of utility bills, a legal consultancy service and more.
This is of course just the beginning and there is more to come. But so far we have more than 125,000 consumers who are active subscribers. This is a bigger subscription base than the biggest newspaper (“Der Tagesspiegel”) of our federal capital Berlin. In fact, in Q2/2020, Der Tagesspiegel had about 87,000 subscribers.
And yes, we are asking for money for this product. I know this is controversial. I do get quite some feedback from consumers who are frustrated or angry at us for charging for a digital product. It should be free. Like the ‘rest of the internet.’ Everything else is free.
I disagree.
My position is: A digital product that creates value for a consumer is something that you can consider charging for.
Why? Well, it doesn’t come for free. Digital products are costly to build and maintain. Every time I walk customers through our office in Berlin, they are astonished by the number of employees we have in research, UX, product, engineering, marketing, sales, operations, customer care, etc. Usually they react like this: “Oh no! Really! I thought you have three people sitting in front of a screen programming your website”. Well, in fact, we have about 650 employees at ImmoScout24.
Why else? More important than costs, digital products provide value. Consumers get value from music services such as Spotify (as an obvious example). Our Plus products provide value for our consumers in their real estate journey, with all the benefits already outlined above. So why not charge for it? Just because it is digital? That’s not an argument.
We have started a journey to build the digital ecosystem for real estate in Germany. And the Plus subscription is one key element.
Look out for more to come!
