Sell-to-rent: Competitive Landscape

Part
01
of one
Part
01

Sell-to-rent: Competitive Landscape

A competitive landscape for Easyknock and Rentback has been provided in this research. Through its new product, MoveAbility, EasyKnock has unveiled a revolutionary program that enables flexible home ownership. Rentback, on the other hand, focuses on connecting homeowners to property investors, providing sale-leaseback services at no cost to the seller.

EASYKNOCK

COMPETITIVE ANALYSIS

  • EasyKnock is "the first institutionalized residential sale-leaseback company in the United States". This has established the company as a formidable force and industry leader in this market.
  • Through its new product, MoveAbility, this company has unveiled a "revolutionary program in flexible home ownership". MoveAbility enables homeowners to leverage their equity in purchasing their next home, before moving out of their current home.
  • EasyKnock differentiates itself from other sell-to-rent companies by offering homeowners about 70% of the home's appraised value. This model is beneficial to both EasyKnock and its customers. The company is protected from the leased home's depreciation, while the homeowner is simultaneously given "a future stake in any appreciation in the home’s value".
  • The company had a successful round of funding recently. This provides an opportunity for EasyKnock to expand its current products and service offerings.
  • Also, the funding enables EasyKnock to fully launch MoveAbility, allowing it to provide homeowners their equity in a flexible way. With the unique MoveAbility, these homeowners can "purchase their next home from the comfort of their current home".
  • Through MoveAbility, EasyKnock can also leverage its first-mover advantage to build a unique and loyal customer base, gaining a reputation for flexible relocation ahead of its competitors.

MARKETING STRATEGY

  • This company specifically targets homeowners across the country. Currently, it focuses on serving homeowners within the United States.
  • EasyKnock markets its products using a mix of offline and digital tactics. In terms of digital marketing, the company promotes its services using search engines, social media, emails, and referrals from websites.
  • EasyKnock also advertises on magazines and business news journals such as Forbes, HousingWire, CNBC, Business Insider, and Bloomberg. These platforms typically publish both offline and online versions of their featured stories.
  • In addition, EasyKnock promotes its programs using telemarketing by calling its customers to convince them about the benefits of using their services.
  • EasyKnock's marketing messages are aimed at promoting the freedom that comes with using their service. On its landing page, the following words welcome visitors: "Sell Your Home. Rent It Back. Gain Your Freedom."
  • In promoting its "Sell and Stay" program, EasyKnock emphasizes the fact that a customer is in full control of the terms of sale and lease. Its marketing message for this program says: "Leverage the value of your home while staying put in the home you love! Now you can use your money, rent, repurchase, or move — all on your terms."
  • In selling its "MoveAbility" service, the company emphasizes the customer's ability to retain the market value of his/her home. In promoting this program, EasyKnock says: "Access your home's value before it even hits the market. Now you have the money and time to find and fund the perfect next home or adventure, without losing out on your current home's market value."

BUSINESS/REVENUE MODEL

  • EasyKnock's business model is structured such that a seller (homeowner) still bears the risks. The company does not make use of a "traditional investor purchase" business model. Homeowners are given about 70% of a home's appraised value.
  • Its business model "protects EasyKnock from any depreciation in the home over the term of the lease". At the end of a lease term, if the former homeowner chooses to allow EasyKnock sell the home on their behalf, EasyKnock receives a refund of the 70% that was paid. Also, another 1.5% commission is given to EasyKnock from the final sale price.
  • Besides generating revenue from the mandatory sale of a home at the end of a lease term, the company also makes money through monthly rent and extra fees which are tied to the purchase.

FUNDING AND INVESTORS

  • EasyKnock has raised a total of $319.7 million in funding. About $215 million was raised through a Series A round.
  • The Series A funding "included $12 million in equity and was led by existing investor Blumberg Capital". This funding was also joined by new investors like 500 Startups, Correlation Ventures, and Rubicon Ventures. Also, current investors in the funding include Kairos, Montage Ventures, and FJ Labs.
  • The company had also raised $103.5 million in a debt-equity round last year.


RENTBACK

COMPETITIVE ANALYSIS

  • Home sale deals usually come with several fees and credit assessments. However, Rentback provides an alternative for homeowners to rent back their homes after selling without having to pay any fees. It closes deals quickly and homeowners can protect their credit score. Also, no credit or income qualifications are required for their deals.
  • While other sale-and-leaseback companies like Easyknock purchase homes directly from the homeowner, some allow the homeowner to simply list their property for sale on their platforms. However, Rentback goes the extra mile to find a property investment company on behalf of the homeowner. This takes away the burden of sourcing from the homeowner.
  • In addition, while competitors like EasyKnock would leave the risks of depreciation in the hands of a homeowner, Rentback takes full responsibility "for the costs of home ownership, including property taxes and structural maintenance".
  • With access to several property investors who have bought homes through Rentback, this presents an opportunity for the company to provide a wider variety of leaseback options by allowing its customers (homeowners) negotiate deals with several investors before deciding on which option best suits their needs. While EasyKnock leverages flexibility through its MoveAbility program, Rentback can take advantage of diversity and choice.

MARKETING STRATEGY

  • Rentback's sale-leaseback service is targeted at converging "homeowners and property investment companies" on its platform.
  • After being founded recently in 2018, Rentback has marketed its products digitally. The company uses backlinks to drive referral traffic from other websites. Rentback also makes use of social media for promotion. Its most significant shares are generated on Facebook. The company also uses landing page tactics in its digital marketing strategy; several promotional messages are displayed with prompts that encourage patronage.
  • In its marketing message, Rentback focuses on the emotional attachment which homeowners usually have to their residence. The company emphasizes the fact that a seller may lose ownership of the property, but they get to retain the "home" by renting it back. It uses the following words to convey this message: "Sell your house. Keep your home."
  • Other messages aimed at driving engagement and conversion include "You have a new option", "Build a bridge", and "Call timeout".

BUSINESS/REVENUE MODEL

  • Rentback's business model is centered on generating revenue through property investors. While homeowners are not charged any fees, "Rentback gets paid a platform service fee by property investment companies that use [its] site"
  • The company "pays most closing costs" on behalf of its sellers (homeowners). These sellers have the option of using their home equity to prepay their lease for one to three years. However, these agreements are dependent on the property investor involved in the transaction. Typically, a lot of "investors allow sellers to renew their lease for additional years".
  • Rentback deposits equity, after deducting prepaid rent (as applicable), into a seller's bank account once the "closing process is complete".

FUNDING AND INVESTORS

  • Rentback has raised a total of $100,000 since its launching last year.
  • So far it has successfully raised funds in just one round. This was done in a Seed round on July 5, 2018.

Sources
Sources