Now that their work disrupting the food-and-sundry-delivery business is done, Favor founders Ben Doherty and Zac Maurais’s next move is to do the same with the home-rental business. With seed funding from investors including Founders Fund Angel, Tim Draper of Draper Associates, Joshua Baer of Capital Factory, Active Capital, and Boost.VC, the Austin entrepreneurs recently created and launched their new app, Sunroom, to help renters move through the process of securing the homes they want in a competitive market.
The Austin-based startup launched the app in March and is “scaling fast,” Maurais said in a telephone interview Thursday. The Sunroom model should be familiar to anyone who participates in the tech-based, on-demand economy via apps for companies like Amazon, AirBnB, Instacart, or ride-hailing businesses (pretty much everyone, in other words). Renters create a profile, which is used to match them to suitable properties culled from the MLS and other sources. They can then procure a real-estate agent to show them what they’re interested in via the app, more or less on demand. Sunroom also provides all the pertinent leasing information about specific properties—application fees, deposits, and the like—in one place. Prospective tenants can apply and proceed with the entire process through the app.
The goal is to get renters into the places they want faster and in a streamlined, tech-based fashion, Maurais said. As longtime renters, both he and Doherty move every year or so, he said, and found the process cumbersome and outdated. “Landlords were asking me to print things out, and I don’t even have a printer,” he said. “Or do things like drive to Round Rock to deliver them a cashier’s check.”
While listings sites and apps have come a long way in terms of showing renters their options and even doing some matching of tenant to space, securing a rental was still cumbersome and time-consuming, resulting in missed opportunities in Austin’s competitive market, Maurais said. Real-estate agents are more interested in showing homes for sale, he said, which can be more lucrative for them than rental spaces; moreover, the Sunroom partners found some agents were uneasy with the feast-or-famine nature of a commission-based income.
Tech has changed our expectations about how our interactions with providers of goods and services should work—as Baer put it in a press release, “More than ever, people want instant satisfaction”—and Sunroom created a different model for the home-rental process. Its agents are paid directly and make around $20 per hour, said Maurais. Commissions from landlords and property owners—typically ranging from 50 to 100 percent of the first month’s rent with traditional agents—go to Sunroom and its operations.
Sunroom set up its own brokerage for its agents, who are fully licensed to show rentals and work as contractors. The company currently has seven full-time agents and 16,000 user accounts and has been actively getting renters into homes since its launch, said Maurais.
As for the app’s effect on traditional agents and brokers, Maurais said Sunroom had received virtually no pushback, and that most seem to be interested in working with the “flood of technology” that the industry has experienced in the past few years. He said Sunroom is also engaged with professional organizations such as the Austin Board of Realtors and other associations that influence the local market.
Maurais said that he and Doherty have ambitions for Sunroom to be a national brand eventually—though not necessarily in the biggest, most competitive markets, such as San Francisco and New York City. “I get most excited about solving problems for what the majority of Americans have to go through,” he said. “I’m not really interested in solving Silicon Valley’s problems.”