Context: We tenants(22-25yo) move to a new city for work, pay high taxes, gets screwed by the landlords, have to pay upfront costs without the 1st salary and have to often resort to personal loans at high interest rates/ask your parents etc.
We have also go through interviews multiple times and sadly there's no digital trail of if you were a on-time rent paying good tenant. Its always start from scratch wrt convincing landlords whenever you move to a new place in high demand areas.
To summarise: I am building a financial platform to solve the following problems:
Thoughts? Ik it may look like "another" loan app but we want to help tenants throughout their lifecycle. There's no demarcation of tenants vs other tax paying middle class segment who stay and work from their own homes.
How would you onboard landlords & tenants who deal in cash for rent payments?
They would never use any platform which leaves a trail of their exchange.
Very good question. Yes it'll be a challenge, but for now we're focusing on tenants who pay their rent through credit card/UPI etc. Eventually just like when insurance used to be all non-digital, now you can claim/take insurance seamlessly digitally, we would attempt to do the same for rents. We are in talks with Digital India SPOCs - also it'll reduce fraud around HRA claims etc
People opt for digital payment for insurance because then they can claim deductions in their income tax.
Landlords opt for cash payment for rental income, to avoid income tax.
The scenarios are very different.
In my opinion, onboarding tenants will not be an issue, but onboarding landlords will be herculean task!
Even if we go by this, people will just see the tenant and landlords on your platform and contact offline.
Brokers will be hurdles, as they never let tenant and landlords be on your platform
Home loan is 250x timee your monthly rent and how can you give loan on only this data at cheaper price and making sure of no default
It'll not the sole data point but there will be many other adjacent alternative data along with traditional ones. But it'll not be collected at one shot during onboarding like other loan apps.
Cred has a rent payment option, it seems to be standing somewhere in Cred Spectrum
Nice idea. You can make a cibil score version for tenants. They can use this to prove how good of a tenant they were when they are shifting houses again. On time rent paid, house kept down etc..
Wow! Exactly. This is exactly what we want to build. Thanks.
Great idea. This can also solve for landlord’s issues with trustworthiness
All that's okay... But where will you get the money from? How will you stop yourself from people gaming your system?
These are the only questions that matter.
How about partnership with banks for lending and only acting as an agent that connects the two parties - bank, potential home-buying tenant. Facilitate on commission. Even today intermediate agents sell home loans to customer on commission from banks. With this you get commission from both parties, at scale, assuming you facilitate a tenant through renting to home buying journey with tenancy ratings, credit rating etc. eventually bringing trust and discount rates on home loans.
Bro, I don't know what is the overall sentiment of this, here. But having seen many other posts and usual sentiments of people, i would say, don't give a fuck. Just go ahead and start executing like it's your last day on earth.
No need to take validation from random strangers. This is a solid problem and you, I, everyone has faced this. Don't pay a heed to anyone, just do it man
Thanks a lot man! I understand but I have been looking for unique criticisms and feedback and thoughts - something I do with all the products I've built till date. Not an issue. Thanks for the motivation too 🙏🏻
Do you plan to introduce a rating system for tenants and landlords? Something that shows how reliable they are?
You'll need lots of ad money to scale it, and just like most rating systems, there can be fake reviews to deal with.
Also, especially in North India, landlords aren't very tech-savvy.
Yes we'll have tenant score. We're only targeting tenants for now. For paying rent on time, having a healthy financial status etc and linking details to your profile will help you better your tenant score. Eventually this would be used by banks and most importantly landlords to have a reduced TAT to lease out their properties.
What’s in it for you ? Looks like only the attach of home loan. The % conversion to attach is very low and that will put the business at risk.
Not just that, we have convert your upfront security deposit into 3/6 with innovation in repayment schedules. For ex - let's say you lose your job, and you've to pay rent - we will do take care. I'm focusing on problems and not really solutions hence wanted the opinions.
Why should i not put the deposit in a bank instead of giving it to you. If you are talking about the landlord’s security deposit, why would landlords have you enjoy the interest earned on it and not them?
IMO there is no need of this product. Sounds like a solution looking for a problem. Can you please list down what are the top three problems faced by your first 100 customers?
Stress during the first month where you haven't recieved a salary but have to pay security deposit+first month rent in one shot. Who gives first usually gets the apartment due to high demand (22-25yo segment) was the major one.
Lots of personal questions/interviews before getting the apartment, and lots of friction when it comes to landlord behaviour with tenant and vice versa.
Financial products is little harder to get during address verification process, permanent address of somewhere else where parents live, current address from somewhere else, and aadhaar address is of somewhere.
I haven't shared my complete solution but this post was to get feedback/insights on if the problems are correct OR any other problems is faced by tenants during their lifecycle apart from finding a good property.
Thoughts?
First two problems are real pain and while the first problem might be painful for maybe once or twice, the second problem is painful till you buy your own house. Not sure how you are planning to solve it, but kudos to you if you can solve the second problem.
Good luck if you can solve them.
How would you handle landlords giving a non-genuine bad rating because of conflicts or whatever? Most young tenants live in shared accommodations, often where the agreement is done only with 1 member. Further, tenants often find a replacement for themselves, the new tenants pay the deposit to old tenants and the owner doesn't care much as long as rent is flowing regularly. How do you handle this?
Really good question. We are focusing towards tenants initially. And we are not going for the usual ratings, I'm aware than manyyyy tenants do not have good relationship with their landlords hence our alternative data points are uni-directional from a tenant POV - like attaching your LinkedIn, paying rent on 1st of month every month and usage of app etc.
Also wrt a tenant paying a share of the rent, this replaces the exact flow of UPI - you can still do it but with additional discounts/rewards as per the rent. More the better.
Wrt deposit, you'll get the upfront security deposit cut into 3/6 repayments, which you can collect from the next tenant and close out from your end - enhancing your credit score and also building your alternate tenant score unlocking other benefits. Lmk if it makes sense?
Q1 makes sense, and that was my own thoughts as well, thanks.
I didn't quite follow response to Q2 - guess the rewards and discount stuff is confusing. The core problem is high upfront cost and landlord trust deficit whereas the rewards and discounts stuff is not solving any problem by itself but is only required for customer acquisition and/or retention. You should not mix this or bring it up if the question is about the core proposition.
If users collect the deposit from the next tenant, then you're assuming that the next tenant would make the payment outside your ecosystem and that the new tenant isn't your user.
I was thinking the same, but in business space.
Like some shops don't pay their dues and shift to some other wholesaler and dupe them too.
All the while good shop keepers are not given credit.
But then the same black/white came into picture
Very nice, yes. We have a good demarcation wrt loan type i.e business vs consumer vs credit card vs home loans. But not really in the user segment. The deserving ones do not get loans easily or with good rates. Business loans and creator loans is something we also explored.
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