Interview with Ian Halpern, CEO Rentshare

Rentshare graduated from the Brandery in our class of 2011. They relocated to New York City where they are growing an empire to take over the online rent payment industry. Ian Halpern is the CEO at RentShare, and started software engineer who was recruited out of college at the age of 20 and was thrown into the startup explosion in NYC. After working in startups for a few years, on the concept that you never know your full potential unless you take a chance, he quit to work on his own passion projects, the latest of which is RentShare. Q: Can you tell us a bit about the inspiration for Rentshare?

“A lot of people would assume our inspiration came from living with roommates. That isn't actually why we got into this. It was from the fact that the only check I was writing every month, or really for anything, was for rent. Every other monthly bill you could pay online. I wanted to figure out why that was the case. It sounded like an interesting problem and I saw potential for a big opportunity. After we dug in a bit, what we found was that it wasn’t just us paying paper checks for rent, but about 70% of renters in the US still paid with paper. The biggest part of our project is getting the technical aspects in-line. For landlords, online payments are complicated and they didn't want to pay credit card fees. Also, in most cases they don't want to accept payments until all roommates have paid. If only two of the three roommates pay, it’s a problem because the landlord wouldn’t be able to evict the tenants after accepting part of the money. The friction with the landlords comes from a lot of things—the challenges with payments, but they’re also an “older” group who rents the buildings most of the time. The rental industry is an incredibly fragmented market. Landlords are all over the map- big, small, the random guy down the street. The large real estate groups hold about 20% of the market, but the long tail of the market is the smaller landlords down to the guy down the street who doesn't have much business experience and isn’t a formalized company. All these factors played in to why the market is so behind in the online payment space. It’s the last frontier. That’s how we got the inspiration.”

Q: You say you’re on the last frontier, what other companies are there with you? How are you different?

“We have one direct competitor in Chicago. Other than that, the big players in online rent payments have gone after the big companies, the ones that own 20% of the market. For them, it’s a long sales cycle, but if you get one big guy, you do pretty well. As for us and our target market, there’s not much competition. A lot of people have seen the opportunity, but it’s tough to get into because the payment infrastructure is a big hurdle. There are a lot of new payment technologies that should make it easier, reducing the barrier to entry, but also making it easier on us. Why are we the best? We have built a consumer model where roommates can pay with their credit card/bank account without ever having to talk to their landlord. It is hugely powerful because the landlords have been the challenge in the past. We removed that hurdle. Now the tenants have all the power and it opens us to the 100M renter market immediately. There’s no one who had figured it out yet.”

Q: What has been your biggest positive development in the past 6 months?

“Interestingly enough, it’s our relationship with landlords. We built our platform to not involve them, but they are approaching us now. Landlords are actually getting really excited by the idea. For about 1-in-6 tenants who use our service, a landlord will give us a call to request the use for all his properties. It is surprising and exciting.”

Q: How do you think the apartment renting industry will evolve in the near future?
         

“There is a lot of commotion in the technology for payment system and real estate technology. The industry is definitely behind, fragmented, and disorganized. There is so much opportunity, especially with the 70% of the smaller/mid-sized landlords. A lot of startups are doing big things with big data analysis and payment systems that will transform the online rental payment industry. Also, there will be a lot of changes as the older more traditional landlords are handing down their control to the younger generations who better value technical solutions."