Real Estate

The Digital Evolution Of Apartment Hunting

Twelve years ago, when New York Magazine profiled Craigslist and its founder Craig Newmark, they managed to call him “schlumpy” and "gnomish” within the first 800 words of the profile. It seems harsh — because it was harsh — but in all fairness, media outlets were very upset with Newmark in the early 2000s. His universal classified page — which, as of the New York Magazine piece, was already 11 years old — felt to many journalists as if it had come out of nowhere to eat their lunch by robbing them of those much-valued classified ads.

“In the past few months, I and countless others in the mainstream media have awakened to the fact that something we thought was benign and even modestly beneficial, if we happened to have a room to rent or something to sell, was in fact a wild beast, loose in the orchards. is changing everything,” Philip Weiss wrote in the article.

And not, according to mainstream journalists, for the better. Scott Anderson, a blogger for the Tribune Company, expressed how many in the newspaper business felt about Craigslist. “It’s just frustrating that even when we [newspapers] try, we more often than not find we are absolutely losing what may be one of the most important parts of the business as it more and more moves online — the ability to connect people to one another.”

Today, there are still listings in the newspaper for things like apartments — particularly in very small, local papers. But for many people, the idea of checking the newspaper for an apartment listing would be as foreign as writing a letter on a typewriter and then using a fax machine to send it.

The classifieds have long since moved online — and they have become more specialized.

People still look for apartments on Craigslist — for many shoppers in a new city Craigslist is the first stop in what is often a lengthy search for rentals. But, dogged by various scams, Craigslist rental hunts can be a mixed bag. You might find the elusive $1,500 one-bedroom in Brooklyn, but you might also find a scammer listing a too-good-to-be-true apartment for a too-low-to-be-real price, so long as you quickly wire them a month’s rent and a security deposit.

In July, online real estate company Zillow rolled out new tools to help time-strapped renters get a competitive edge in the rental process and help landlords avoid the time and hassle it takes to screen potential tenants.

The new tools allow people to apply for multiple rentals with one application, including background checks and credit reports. They also allow renters to pay their landlords via Zillow. According to Zillow, 35 million renters visit its rental sites and mobile apps each month to make the rental process easier and smoother.

“Renters tell us they want the entire rental process to happen online, from search to application to payment,” said President Jeremy Wacksman in a press release. “However, most landlords don’t have the resources to offer these services. We’re excited to provide the technology to help renters and landlords have a better experience.”

That better experience is also cheaper: on average, renters can expect to pay around $40 per application, but using the Zillow platform they pay a single flat fee of $29 to submit one application an unlimited number of times during a 30-day timeframe.

The online application includes a credit report provided by Experian, an eviction history and a background check as well as a few options for online payments so that renters can pay their monthly rent with either debit or credit, or set up automatic payments.

Zillow is not alone in automating and digitizing the rental process.

Zumper, a San Francisco-based startup, has raised $46 million to expand its end-to-end real estate rental platform. Zumper allows tenants and landlords to find each other, create rental agreements and offer out help services when needed. The funds will go toward enhancing the service, particularly around payments, so that users can conclude full agreements with landlords totally digitally — and pay their rent monthly through the platform.

As of today, Zumper has about 1 million listings and hosts 8 million visitors per month.

Anthemos Georgiades, CEO and co-founder of Zumper, says his firm’s vision goes beyond helping consumers search for real estate, since many sites already do that. Instead, the startup decided to focus on simplifying, speeding up and improving the whole rental process.

PYMNTS spoke to Georgiades shortly after the funds were announced — we’ll have that full interview next week — and during the discussion he said that the digital frontier is natural for apartments and rentals, because of all the ways it can streamline the process.

“Shortly before we founded Zumper in 2013, I remember thinking in the era of Uber, having to hunt forever for an apartment and jump through endless hoops was senseless. I think the digital evolution in rental real estate has been the evolution of sensibility.”



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.