A new company is tackling the rental property maintenance challenges that face many landlords and property managers every day in managing rental housing.
By John Triplett
In an interview, Keepe Co-founder and CEO Rishi Mathew discussed the primary research that led him to start the company and provided a question and answer about the company.
In doing the primary research, “We had more than 400 different conversations with property managers, contractors, consumers and tenants,” Mathew said.
“The salient thing we got from property managers was that there are folks who have their own maintenance crew, they have enough density of units – eg. 200 units in the same building – they can afford their own crew. But for property managers who have 50 to 250 units spread out in a particular city, like Seattle and suburbs, then it is impossible to maintain your own crew. You have to have a big crew to manage it and it is not economically feasible.”
When property managers do not employ their own maintenance people
“Many have a rolodex of vendors they work with. The problem is, because they do not employ them, property managers have to depend on the vagaries of those vendors,” Mathew said.
“Let’s say a maintenance request comes in, and they try and schedule a vendor and the vendor is not available at that time.
“And so they have to go to the next one, and then next one,” he said.
Average 14-day turnaround on maintenance
“What property managers were telling us is that the turnaround time from a maintenance request coming in to the problem actually getting solved is like two weeks and up,” so some get done sooner and some take longer Mathew said.
“That 14-day average turn around was their No. 1 problem because tenants get really upset and then they vent on Yelp or other social media and say, ‘These property managers are really bad because they are not getting my problem fixed.’
“We validated that by looking at Yelp reviews of some of these property managers and the No. 1 complaint on Yelp for property managers is that maintenance is shoddy, it takes a long time, and quality levels are not high. That is what we validated- what they were saying.
“For the property managers themselves, it consumes a lot of their time. They are running interference between the contractor and the tenant. They are doing the scheduling, they are fielding all the bids, looking at all the estimates, and then picking the right contractor and managing the scheduling. That takes a lot of their time,” Mathew said.
Two high level points out of the research conversations
- It takes too long for any maintenance request and tenants are unhappy.
- It takes a lot of the property managers own time and they would rather have that time back to focus on getting new clients and managing more units.
So that is how Mathew and his co-founder thought of Keepe as a solution to that problem.
“We want to be the one-stop shop for maintenance for property managers. They send us a maintenance request and we take care of the rest,” he said.
Tenants now have a ready audience
“Social media has changed everything when it comes to the relationship between the property manager and the tenant,” Mathew said.
“Tenants can give both positive and negative feedback on social media. Tenants now have a ready audience of current tenants and future tenants as well as owners. It has made property managers sit up and take notice. They cannot ignore that feedback any more.
“They are being held to a very high standard just like a lot of other industries. So property managers have to be responsive to the tenants’ feedback and be considerate. A lot of good, successful property managers are that way already but now the standards are going up,” he said.
A platform for all sizes of landlords
“We have a lot of independent landlords on our platform,” he said,
“Our long-term goal is to help the rental industry in all sizes of rental housing. Right now we are focusing on property managers, but the product and service we have is built for everybody.
“We want to make it possible for the independent landlord to be successful and manage their units themselves without having to depend on anyone else for maintenance management,” he said.
A Q&A with the CEO
Q: Why did you found the company?
A: Initially, our goal with Keepe.com was simply to make maintenance and repairs an easy process for homeowners and renters. However, we discovered that in the rental market, property maintenance is like toothache. There is a huge opportunity to make a real difference in the renting experience for renters, property managers and independent landlords, so we jumped at the opportunity of creating a technology-accelerated online marketplace that makes property maintenance a far easier, more transparent and super-convenient solution for these stakeholders.
Q: Why are you qualified to operate in this space?
A: Our team has a unique blend of experience in software technology, real estate and residential contracting that we want to leverage to create a paradigm-changing solution for renters, property managers and landlords.
Q: What demographic info do you have to show how big the need is out there?
We did a significant amount of primary customer research (hundreds of interviews with property managers, renters, landlords and contractors) and found that the number one obstacle for property managers was the lack of an effective maintenance solution. Some property managers have insourced their maintenance operations in order to keep costs low, however the overall high cost of maintenance combined with bad reviews from tenants is a significant burden. Others who don’t have or can’t afford a maintenance crew depend on a small rolodex of external maintenance pros, but their ability to influence responsiveness and quality levels is limited.
Q: What problem are you trying to solve? Especially for the multifamily property manager. Probably not talking about the big guys who can hire their own full-time maintenance folks, but rather the smaller operators.
A: The problem for property managers who don’t have their own crews is that they cannot control responsiveness and quality levels of the maintenance professionals that they work with. Additionally, property managers are spending half their time running interference between their tenants and maintenance guys. With Keepe.com, they get access to hundreds of qualified and licensed maintenance professionals available for immediate (even same-day) service. Keepe.com provides an end-to-end service that includes free estimates, tenant scheduling, contractor dispatching and transparent pricing. Some of our customers have realized a 40% time savings in maintenance overhead and a multifold increase in tenant satisfaction from using Keepe.com for their property maintenance.
Q: Most property managers and landlords tell me maintenance is their No. 1 headache/issue. What do you see so far as the No. 1 maintenance issue you have to deal with?
A: We see a wide array of maintenance issues ranging from repair or replacements of garbage disposals, kitchen sinks, appliances, roofs, heating/cooling. We also see a regular influx of rental turnover projects resulting from lease-ends. In both scenarios, time is of the essence. Either tenants are upset from slow responsiveness, or during turns, the owner is losing money because the unit is not ready for showings and the property is vacant.
Q: Property managers sometimes markup maintenance, sort of their handling fee. How do you charge?
A: We have a transparent business model. We charge an hourly rate that is prorated to the minute. The contractors on our network (also known as Keepers) are accepting jobs and logging time on our proprietary app. There is no markup on materials. The hourly rate is set at market prices and adjusts to the location (zip code). The transparent pricing is beneficial to both property managers and maintenance professionals. Property managers pay market prices and maintenance professionals get the benefit of reduced overhead and zero marketing costs.
Q: How many customers do you have?
A: We have over a hundred property managers on our network in Seattle and Phoenix. More locations coming soon.
Q: Breakdown between multifamily and single-family?
A: About 40 percent multifamily and 60 percent single-family.
Q: Are you the best fit for the mom and pop landlord?
A: We have many independent landlords who are using our platform. However our value proposition is primarily a great fit for property management companies. In the future, we plan to create a streamlined solution for independent landlords.
We created the company with the ambitious goal of transforming the renter experience by modernizing property management and maintenance. Property maintenance today is too slow, too painful and too opaque for property managers, landlords, tenants and maintenance professionals. We aim to create technology tools that delivers fast turnaround and optimal quality at reasonable cost. In the process, we want to make renting, land lording and managing properties way easier than it is today.