Why Renter Leads Are Worth More Than You Think with Alex Stringfellow (CEO of RentEngine)

My goal is that when somebody buys RentsEngine today, it will be 2 or 3 times better a year from now. And they will feel like, wow, I'm very glad I got in on the ground floor of this product. It continues to get better. And also it continues to be built around me and people like me. We're very close to our customers in terms of the features that we build. The ones you see released on Wednesdays almost always come from— I can tell you exactly which customer was like, I think this would be really useful and it's useful for others as well. So let's go ahead and build it. Let's ship it this week.

Yeah.

And hopefully this is pushing the industry forward as well. So that they can continue to build, other players in the space can continue to serve their customers and kind of give everyone a kick in the ass.

Friends, welcome back to Peter Lohmann's podcast. I'm excited today to introduce Alexander Stringfellow, CEO and co-founder of RentEngine. Alex, welcome to the show.

Peter, thanks for having me.

Excited to get you on here, Alex. RentEngine has been making some waves in the industry. Felt like you guys kind of popped up out of nowhere and have been gaining a ton of momentum. Seen you at the trade shows. We're a customer of RentEngine here. My team loves the product, and I really wanted to get you behind the mic and hear a little bit about your story and where and how did RentEngine come to be and where is it going? So maybe let's start by having you give a little bit of background. I think if I remember right, you have some property management background yourself. I always love to see that when a vendor actually has done the job that they're purporting to help solve. So tell us a little bit about that.

Yeah, so back in 2023, my co-founder and I, Lior, uh, started a property management company down in South Florida, in Miami, Florida. We were both living down there. We had a little bit of experience in a prior life, each working in property management, but decided, hey, We see an opportunity down here to build a great property management business. Miami's an interesting market. It's a lot of condos for rent. It's quite different than the markets we serve today, but we thought, hey, we'll take a run at this. And something that we realized pretty early on as a new management business is that when you're new and you're bringing on clients, most of those clients have vacant properties. They're either tired of their old management company and they're coming to you for a change, or they just purchased this property, it's empty, and they need you to lease it up. And so we pretty quickly realized that A big part of the work we were doing was actually leasing up new vacancies and then they would go under management with us. That led to a lot of friction. We were driving all around town. As you might know, traffic in Miami is notoriously bad. And so we really needed to solve this one way or the other. And so we started tinkering ourselves in early 2023 on a way to make leasing faster. We had tried some of the other tools on the market. They just didn't do enough specifically around kind of response time, around follow-ups. And so just over the next couple years, we just kept iterating and iterating on really creating a better mousetrap, if you will, for leasing that we could then see higher conversion rates from lower days on market. And it wasn't—

so this started out as a tool for your own use at your management company to lease up condos in Miami faster.

That's exactly right. And we had no intention of commercializing it until other property managers in Miami kind of asked if they could try this. We kind of put it out there, they liked it, and we realized, hey, we might be onto something and began to double down into what eventually became VibeCoding.

I mean, there was no AI assistance. Was it you or Lior who has a background in sort of coding and programming?

This is Lior. So he's the technical side of RentEngine and pre-ViveCoding. This was pre-AI. Like as we were launching our management company, the first version of ChatGPT, you know, the one that would hallucinate everything was just coming to market.

Okay, got it.

So we built it for ourselves, realized that there was an opportunity there to bring it to other property managers and slowly started to expand. Through Florida before fully doubling down on RentEngine.

Okay, so the— you, you started to, you know, make it available to other Florida property managers, caught some momentum and some energy, and then as you went nationwide, what ended up happening with your property management company? Is that still something you operate on the side, or how— where did that go?

So we ended up selling the property management company almost a year ago, just realizing that we couldn't do both at the same time. And while we enjoyed a lot of the property management, and it was More importantly, it was a great testing ground for RentEngine, right? Like we could run our own product, try new features there, made sure they were safe and worked before rolling them out to the rest of the folks using RentEngine. We ultimately decided to sell last year and fully focus our efforts on RentEngine.

Okay, got it. And how do you handle that testing and validation now that you don't have a built-in testbed with your own management company?

So from having the management company, we learned a lot around where we could really push the needle, where we couldn't. We built a great internal testing environment to very closely replicate what an actual management company would look like. And something that if you are a RentEngine user, you're probably familiar with is we ship a ton of new features very quickly. And really what that looks like is we ship the new features very quickly to staging, and then we have a very rigorous testing process in our staging that very closely replicates what a management company looks like, and specifically all the different flavors of leasing across the United States. There's probably 6 or 7 different archetypes of the way teams do leasing. And so the testing that we do goes through each of those before it ultimately goes out to market.

That's really interesting. And I, I don't know what other vendors are doing in terms of testing and especially testing with different ways that a management company can do that function. But I feel like I wish we had more of that because A lot of the software that we use day to day feels kind of buggy, kind of slow, and often you get the sense that they haven't really tested it for the specific situation that your or my management company is using it for. So really interesting point, and I have to imagine that that's made a lot easier with AI. You can spin up test showings and test leads, and that's gotta be made a lot easier now with vibe coding and AI.

So AI helps there, but something that we discovered by accident is the more people that we can bring onto our team who have prior property management experience, typically they went elsewhere to work in software and they came back into, into management with RentEngine, makes it a lot easier because there's instinct. So for example, our entire CS team are folks that are previously had property management experience. And so they take a role in testing as well. And I think That instinct is not to be underestimated when it comes to building software for a specific vertical like property management.

I love that. Yeah, I mean, someone with property management experience is going to identify issues or opportunities in a way that you just could never reproduce, no matter how skilled a developer or customer service person you bring onto the team. I mean, obviously it helps that you guys have a background in property management, but you can't be everywhere and touching every part of the company and the product.

So that's exactly right.

Yeah. I want to hear a little bit about, you know, your space. We'll talk about, you know, you guys launched an application product, but I want to kind of save that for now. Let's focus on the leasing and showing component of the product. That was already a pretty crowded market and, you know, we had Rently, Tenant Turner, ShowMojo, others. Who have been in the space a long time, a lot of experience, a lot of install base. What made you pick this? Uh, I mean, I, you explained how you picked it, but what made you decide, yeah, I'm gonna go up against these guys, we can do this. What, what was the insight or the, I just, I wanna hear a little bit more cuz for me, like I would not have done that. I'd be like, listen, let me pick an area that's a little less crowded. With fewer incumbents, maybe one who's not very well financed, and I'm going to go compete in that space. And you said, you know what, I don't care that there's private equity backing, you know, we got this. So tell me about that.

It, it wouldn't have been possible without our property management experience. And for us, the, the fundamental insight, the aha moment was really around communication and the way communication goes into the leasing process. And so to take a step back here, the way the products that you kind of had alluded to have been on the market, very focused on showing scheduling and effectively like an if that, if this, then that scheduling flow, similar to the way you would book a calendar link. What we really realized was that the actual communication, specifically text communication, needs to be the heart of the leasing process, not just the scheduling. And so concretely, what that means is a couple of things. One is response time. Response time is a non-negotiable. How quickly will that prospect hear from you via text message? Because in this day and age, nobody's really checking their email. How quickly will they hear from you via text message? What is the call to action on that text message? So the specific copy and wording of each of those messages. And then the follow-up cadence after that. So in many cases, and I was actually in a coffee shop the other day and I was watching a guy scroll through Zillow and effectively look at listings and he booted up his computer. He opened up Zillow.

Not Zillow. Oh my God.

Anyone but Zillow. He opened up Zillow. He, he scrolled, he set his filters up, he set his price range, his beds, baths, his neighborhood. He zoomed into the map view. And then on the right-hand panel, there were—

Yes, thank you. That's like precisely how I envision people doing it. It's gotta be the map view.

It's the map view. It's, it's, they are not looking to see where you rank on the list, but you just have your properties. You click through them. And what we've realized, and me watching him really validated this, was he didn't spend more than 7 or 8 minutes looking for properties because there's only so much you can do. You set all your filters, you set your map view, you click through each one if you If you like the photos, if you like kind of the vibe you're getting, you click the contact button, you move on. You kind of run through the 10 listings that meet your criteria, and then there's nothing else to do.

So you just come back to it in a week and you're like, maybe there'll be some more listings. Yeah.

And so what we realized was the real alpha is capitalizing on that lead the moment that they click the big blue button or the green button or the red button to reach out to them, introduce yourself, offer to schedule a showing, but then also have a more open call to action because oftentimes prospects will have questions around Do you accept Section 8 vouchers? Will you accept my two German Shepherds? Can I move in next week? And so ultimately that led to, okay, from the very early days, AI needs to be part of that workflow to be able to answer those questions and engage that lead while they're hot. Because like you said, 7 or 8 minutes later, they close their laptop and they come back to it next week. And so we realized you have to capitalize on that 5 to 10 minute window. And then from there, really building out the follow-up sequences because we realized that Prospects will get busy. They'll have to pick up their kids from school, step out. And so they may forget what they were doing with you. You constantly need to nurture those leads with the right messaging and with the right timing. A pretty non-obvious insight, although in hindsight sounds obvious, is if a lead inquires at like around 6 PM and later schedules are showing around 6 PM, that tells us that the best time to follow up with them is around 6 PM. They are doing their leasing activity. They're thinking about leasing. In the evenings, and that's when we should be nurturing them and following up with them. And so really all of this comes together to say that our unique insight was that communication has to be at the heart of the leasing process, making that as easy as possible for the prospect and for the leasing team. And so what we built out is this thing called the Command Center, which is effectively a place where the leasing agent could spend their whole day. It has every message coming in, all the key details and context they need to know, and really bringing kind of communication to the forefront instead of kind of guest cards or showing scheduling.

Okay. Really interesting stuff there. The, the identification of texting as kind of the primary communication method is something that I've spent a lot of time thinking about, not necessarily on the leasing side, but just in the operations of a property management company. The challenge I find with communication in the modern era here is there's really 3 channels you have to deal with. You have phone, text, and email, and they're all significantly different in terms of what technology you can use to communicate through those mediums, response time expectations, etiquette, and just everything about them is quite different and distinct from one another. And so you end up having to bounce— right now you end up having to bounce around and use different tools to handle those different channels, and it makes for a very disjointed experience for everybody, and you lose the context in the process of doing that. So at my company, we have RingCentral for phones, we do some texting through Buildium, we do email through LeadSimple, and so it's just, it's all over the place. And so I love that you've identified that, and I honestly wish more of the tools that we use would go all in on a centralized communication hub that way. We've seen some great movement and progress. LeadSimple, especially, I wanna call out as really working on this problem, but to me it's not yet solved in a way that feels proper and smooth and natural for everybody and intuitive. That's the main thing that I wanna see is I want to, I want it to feel intuitive. I wanted to ask you though, like in terms of this response time, now you have some really great AI built into the product. To handle especially text and email automations for that responsiveness that you identified as being important. But when you launched, you didn't have the AI built in. And so how did you sort of make sure that the teams using the product were being responsive? Because you called that out as being super important.

We made it as easy as possible. And exactly to what you, you mentioned a moment ago, having all the communication one place where the agent doesn't need to jump between tabs say, okay, here's a ping, I need to get to this text message, I need to use this other system to make a phone call. Those two systems aren't communicating with each other. We brought everything into one place, so when the leasing agent is at their desk, they are going to see every piece of communication related to leasing in one panel without changing tabs. So that part of that included from day one having a phone system built directly into RentEngine to take inbound calls, make inbound calls, make and receive calls. And then very quickly, we also fast-forward with a phone app as well, realizing that A lot of leasing, especially in scattered site, if you're doing any kind of in-person showings, has to be done on the go. And hopefully nobody's texting while driving, but I'm sure some people are, and we need to make that experience as easy as possible for them to keep up with their leads on the move.

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A couple months ago, I released a piece, an article looking at the value of a renter lead because in the scattered site world, we oftentimes think of a renter as free, maybe not quite negative value, but at the very least free. They click through. I haven't paid anybody anything for this lead. And then I have to work the lead to get them to, to sign. Ultimately where we came down to, and this was with some conversations with multifamily property managers, kind of senior marketing person at Greystar, which is the largest property management company. In the country that focus on multifamily, really was able to pin down that the value of a renter lead is somewhere between $24 and $90 depending on how you look at it. And so there is real value there, especially as we start to think about platform risk and where the, the websites that we market out to control the flow of leads. It really becomes clear that having a lead CRM for renter leads is a compounding value for a property management company. I, I wouldn't be surprised if in 5 to 10 years there's a real value assigned to that when a property management company sells, similar to the way that we're starting to see Google reviews have a ton of value relative to, to the business at sale. And the reason for that is, as we know, renters are renting for longer. They're older and older as they continue to rent, and most Americans aren't moving very far when they rent. And so therefore, if you're a property management company in a city and a lead inquires on one of your properties, there's a good chance they'll be renting in that city near one of your properties next year, the year after, 5 years from now. And having a bank of leads that have given you permission to contact them and that you kind of keep clean and organized, and you also know when they're next going to be in market. And so if they inquired on your property in February of this year, there's a pretty good chance that if you start reaching out late December, early January of next year, They're going to be thinking again about, okay, am I moving? Where should I be moving to? And you'll be able to reach that lead 100% for free, fully through your own resources, and effectively capture that lead again before it goes out to market and starts to click through the internet listing site. So I would argue that that database of leads is going to become more and more valuable and something that cannot be replaced by AI, by vibe coding, or even by the internet listing sites.

Really interesting. Yeah, that, that's something that I've spent zero time investing in. Now, of course, on the owner side, we're very careful with our CRM and our leads and our follow-up cadences. That's all been carefully thought out, and there's a long history of discussion and experimentation and process built around that throughout the industry. And I would love to see that same rigor start to be used just as you described on the renter lead front. First question that I have is like, in that reach-out cadence in late December, early January, do you see that being a text or an email?

I see the use for different methods. So in my mind, text is the best way to get them to actually pay attention here today that you have something to offer them. I think you have very few touch points, otherwise they'll reply stop, they'll unsubscribe to your text message. You have very few touch points, but that opportunity has a ton of visibility. There's a 90+ percent chance it's going to get read. And I think that has to be short, to the point, acknowledging that, you know, that they're in market for a rental. They previously inquired on one of yours. Here are available listings near you. Take a look. Where I see email deployed very successfully is around really taking inspiration from e-commerce and presenting nice, beautiful photos of your listings, keeping the brand awareness top of mind of like, hey, this is RLPMG. We're in this part of Columbus. Here are the beautiful properties that we have for rent this month and really starting that cadence maybe 1 or 2 months earlier via email so they can build brand awareness. They can kind of get a visual flair for it so that when you hit them with that text message sequence in late December, early January, there's a much higher chance of them engaging.

Yeah, I love that. You mentioned e-commerce there, and I think in a prior conversation you had mentioned that you really see e-commerce as an area that we could take inspiration and ideas from. Anything else come to mind that e-commerce has really nailed and is like, every e-commerce operator does X, Y, and Z, obviously, whereas in property management there's some ideas there that we could incorporate and would make a big difference for us?

Oh man, e-commerce is probably 10 years ahead of where we are at with leasing. And the, I think the reason is that the e-commerce business is so much harder. You have to worry about inventory, you have to worry about sending half of your revenue to Google or to Meta for ads. And so really you have a lot less to work with there and have to get very creative. Particularly where I would look at that would be getting very, very smart on where your leads are coming from, how you're able to drive more volume of leads, how you can then remarket to your existing lead base. And so like we talked about there, email campaigns, text campaigns, and really being able to track the performance of those, what messaging is working. Cross-selling and effectively increasing the average lifetime value of a customer. So let's say they inquired on one of your homes. There's a very smooth process built into Shopify, built into their plugins that kind of cross-sells and says, as you're about to check out, hey, maybe this one is the fit, check these other ones out. Bringing that cross-sell mentality into leasing feels like very low-hanging fruit. Even things like cart abandonment, until we really came to mind here, there wasn't much around remarketing to leads when they fell out of the funnel and nurturing them. And that's something that e-commerce just does really well around being able to continuously warm leads, get them, get them to that checkout page, make sure that they actually cross the finish line. So we're constantly learning from them. We have a really large feature coming out in early fall that will address a lot of this and really kind of help bring leasing into the same vein as e-commerce.

Awesome. Staying on the renter leads just for a moment longer, you and I chatted about an interesting model that I think Zillow is either testing or has rolled out in multifamily, which is pay per lease. So instead of charging you per lead, you actually pay on a signed lease and obviously you pay a lot more, several hundreds of dollars. But in the meantime, you wouldn't pay to have your listings up and you would not pay per lead. So is that something you see may come down to us here in ScatteredSite, or what do you know about this product?

So, so far this product is in early stages with the very biggest property management companies, almost all multifamily. And a lot of that has to do with the PMS integration as well, because there's a level of trust that, from my understanding, that if you're going to only pay per lease, there has to be a clear attribution that this lease came from X source, and then you can pay back to X source. As you start to get into smaller management companies with different PMSs, that may be a lot harder to track. Generally speaking, I don't think that's the way— that's the world we're going to get to. It's a harder business in my mind, and even though you can charge more for it, I think there's just a lot more operational risk to these listing platforms that can be better served to their bottom line through things like marketing and pay-per-lead.

Sure. Speaking of Zillow, you know, I've on the record not a fan of the control they've aggregated in our industry. We see Zillow having a paid platform. Apartments.com also has a paid platform that we're actually a customer of here at RL Property Management Group. How do you tread this balance? Because you, I mean, your customer is us. And we obviously don't like the fact that these platforms are charging us. But on the other hand, you and I both need the Zillos and the Apartments.coms of the world in order to operate our business effectively. RentEngine would be doing me no favors if you angered Zillow and could no longer syndicate your leads there, my leads there, or my listings there. So how are you navigating this and what do you, where do you see the winds blowing?

So we work really closely with all of our listing partners, and I do have to call out Zillow as being always ahead of the curve technologically. And I think that's part of the way that they've been able to generate as much market share as they have and as many eyeballs as they do is because they're constantly pushing the envelope. The way I see it from my seat is that we need to work as closely as possible with them to be at that cutting edge and to be iterating alongside them. An example of that is Instant Tour. We started the conversations with Zillow in late 2025 around bringing Instant Tour to the scattered site world, something that had existed in the multifamily world. And we launched Instant Tour together with them at the beginning of 2025, months ahead of any other platform in the scattered site world. That allowed our customers to get a 3 to 4 month head start on Instant Tour and the value of those leads coming in with less friction when it comes to prescreening and scheduling. And so That's the model that I want to keep doing with not only Zillow, but the other sites is to work hand in glove with them and bring the best, best learnings from multifamily into the Scattered site. And then we bring those to our customers first. So they get the value of them. And I think every, every one of these listing sites is trying to figure out, okay, how do we get more eyeballs on the page? How do we keep eyeballs here? And then they can't do too much to anger their inventory as well, because ultimately if a whole lot of property managers stopped listing, on one of the listing sites, that listing site would become less valuable because the renter in the market would realize it's missing some listings and therefore not a trusted source for every single listing that you have. Yeah. So it, it is a real balancing act between all three parties here. And so what we found is work very closely with them on the product, they'll create a better product for their renters. We'll be able to deliver something to our customers first.

What are the products you've seen from Zillow or any of the platforms that have really moved the needle in terms of days on market or lead flow? So you mentioned the Instant Tours. I know Zillow has released 3 or 4 kind of headline features over the last few years. Which of those has actually made a meaningful difference?

So Instant Tour by far makes the biggest difference because it cuts out 2 to 3 of the back and forth steps when it comes to prescreening and scheduling a showing. So what it means is the prospect, when they're on Zillow, can actually see without even clicking what the available times are, select a real available time, not like a request for a time, but actually this syncs in real time from RentEngine's availability to Zillow. They know that time will be available. They can go through an accelerated pre-screening depending on the property manager settings, and that showing will be scheduled way more consistently than going back and forth through text and pre-screening. I have to also call out Apartments.com because Apartments.com realized that When somebody clicks the Apply Now button on a listing, instead of the Schedule a Showing button, they want to apply now. And so they updated about a year ago, 6 months ago, the Apply Now button on their site to go directly to the property manager's Apply Now button so that that lead can go directly into the application flow and you don't lose them to get back and forth. And so I think each platform is taking a slightly different approach, but these gains are going to start to compound.

I love that Apartments.com reinvented links. Like, that's, that's great. What about Zumper? I, for a while there, like several years ago, it seemed like they were a monster in terms of lead flow and there was a massive amount of lead activity coming from Zumper. This was back 3, 4 years ago. It seems like they've fallen off. Are they even in contention? Or like, what do you, what do you see from Zumper?

They are in contention. We do see markets, especially parts of the Northeast where they're particularly strong in, but the dirty little secret in rental listing sites is that so much of it is still driven by them paying for ads on Google. So if you, I mean, you and I, we talk about Zillow and Apartments.com and leasing all day long, but if you're a renter who only thinks about renting a property once every 2 or 3 years, you don't have a real strong affinity to Zillow, Apartments, Realtor, any of those sites. So the next time you go out to find your next home and you Google apartments for rent in Hartford, Connecticut, if Zumper has purchased the top spot on Google sponsored links so that they are the first, the first link to click, that lead will probably become a Zumper lead. And then they'll go through Zumper, they'll build a little bit of brand affinity. If it happens again, then they're probably almost certainly going to become a Zumper lead. And so there's still so much money. If you go and Google now houses for rent in Columbus, I bet you 2 out of the 3 sponsored links are going to be Zillow and Apartments.com, maybe Rent.com as well. So still so much of it goes to paid marketing that then flows into Zillow and Apartments.com.

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Best business model ever.

The default homepage for the internet. I mean, how do you, what do you even do about that? Like, that's just, that's ridiculous. Two is like, of course with AI, you know, there's an opportunity here to, there's an opportunity for habits to change. And so I don't know where that's gonna lead or who that value's gonna accrue to. But that's interesting to think about. And then also Zillow, it just, yeah, that's, it's frustrating to hear that, that these are just Google leads essentially that I could separately be paying for myself. Do you see property managers just bypassing Zillow and just saying, well, hell, if two-thirds of these are coming from Google anyway, let me just shortcut Zillow and I'll just buy the leads myself by paying Google. Cause then at least with Google, you know, like the thing I've always said about Zillow is there's no transparency on their pro— their product, their paid product. You have no idea where your money's going. With Google, it's very clear. You can get like all this detailed information about the auction process and the bidding and the keywords and the performance and the click-through rate. And it's like anything you want to know about where your money's going in Google is available to you. It couldn't be more different from paying Zillow's platform fee.

So I do see property managers, especially once you cross about 1,000 units and you have pretty good density in kind of a couple neighborhoods that you serve, even in the scattered site world, paid ads can make, can make sense and they can be profitable. And really where that comes is you will almost certainly not be able to make the ROI work if you're doing Columbus homes for rent as the Google keyword that you're going up against. But if you do East, Upper Arlington homes for rent, or if you do Olentangy homes for rent, there's a good chance that the listing sites aren't bidding on those keywords. They're too long tail. They're kind of centralized teams don't know that those neighborhoods even like are, are ones that they should be bidding on. Those, those per click costs tend to be pretty low and you can make the math work. I think the, the thing that you need there is you'd want to have somebody on your team that has real Google Ads experience, but with enough density, And enough volume that you can serve in a pretty tight group of neighborhoods, Google Ads absolutely makes sense. We actually rolled out an attribution feature 4 or 5 months ago that made this really easy so that when leads come in through Google, you can track exactly where they came in from Google, how they're converting through your funnel, and really being able to get granular as to how that compares as a lead source to Google, Zillow, Apartments.com, etc.

Okay, that's so interesting. This to me sounds like a business opportunity. If you are listening to this and you know Google paid ads backwards and front, why not spin up a little agency that basically is like the Geek Real Estate Marketing guys, but for tenant leads instead of owner leads? And you say, listen, I'm going to bid on keywords in areas where you own or manage rental homes and you will pay me some low flat fee per lead, and I will work the Google magic on the backend to make this all make sense. And together we can cut out some of these platforms and just go straight to the source. I mean, I feel like that's a huge business opportunity for the right agency, for the right, for the right couple of people.

Definitely. There's a lot of, a lot of opportunity there. Again, I think it has to be done right with enough density. You, you need to have enough listings that are close enough together that you can kind of afford to run traffic and advertise it across those listings, but it absolutely can make sense. I look, I think Zillow, Apartments.com, Realtor are all still going to be very valuable. They have brand cachet. They run ads on football games, but being able to diversify is always healthy as the property manager. And then the other cool part is those leads have only seen your, your company. They're not getting shared out to 4, 5, 6, 7 properties that they're clicking through on the same webpage. They go to the RL website and you get to get first dibs at them.

Yeah. Okay. Let's talk a little bit about product direction. So you recently launched an applications product. Love to hear a little bit about the strategy there and where RentEngine is headed from here.

So we rolled out rental applications at broker-owner as the public launch 2 months ago. It's something we'd actually been building in alpha and beta phases for over a year, pretty much since the first early days of RentEngine. What we realized was that there's a real gap in the leasing process. So a lead comes in, they communicate with you, schedule a showing. If they like it, they get the application link. They get then sent to some third-party application provider where they have to log in, give their phone number again. It's a separate interface. If the property manager has questions about their application, they have to text them through a separate phone number. It feels— and the data lives totally siloed in that application software. And what we realized was it's the natural fit to bring that within the leasing platform so that the lead has a consistent, pleasant experience all the way from inquiring on your listing through submitting the application and getting approved in one system. It's a consistent user interface for them. It's the same phone number with text and call that they're interfacing with through the whole process until they get approved. And for the property manager, they can just use one system. There's no more opening up like a third-party application software to open that tab to check the status of the application, to then relay it back to the prospect. It all lives in one place, one, one pane of glass, if you will. And even more importantly, the data is now fully centralized. So you can see exactly how well a lead performs from the moment it comes in until you've approved that application and started the lease signing process. And so We really thought there was an advantage to just bring all of that into one system. It makes the property manager's life easier, it makes the prospect more likely to convert, and the reporting is just a whole lot better since it's fully end-to-end through one platform. We finally had gotten it to a place where we felt really confident through alpha, through beta testing, that we wanted everybody who's on GrantsEngine to experience this. And so we rolled it out at the end of April, and the results have honestly been mind-blowing for me. I didn't think it would catch on as fast as it did. I think there was a lot of pent-up demand, just a lot of frustration in leasing teams of why am I opening this other software just to do applications alongside my PMS, alongside my leasing software? And that's been the biggest driver, honestly. Fraud is a part of that. We have best-in-class fraud tools, but really I think the bigger driver is I want all my data, all my process in one, one software for leasing. And so with that, a couple of metrics in terms of what we've been seeing so far is 25% higher conversion rates from lead to approved app— or lead to submitted application. And then about 45 minutes fewer human processing time when it comes to actually reviewing and approving or rejecting the application. And I think both of those can really be ascribed to bringing it into one platform and making that user interface as native as possible.

Hmm. Okay. I got a couple questions on the applications. I mean, when I think rental applications, there's two areas right away that pop up into my mind. One is. What are you using for the backend screening itself? There are companies that specialize in this that have worked on it for decades and claim to, you know, have unique advantages here because famously the criminal database in particular is incredibly fragmented and it's not available that you can just quickly do a lookup. Sometimes there's people having to run out to do county, pull county records from a physical file and report back and If you've ever wondered why it takes 12 to 24 hours sometimes to get criminal back, that's why. The other thing that question that pops on my head is like fraud. You mentioned briefly, but like identity verification, income verification, fraud detection. Again, these are all like, we have point solutions in our space, vendors who focus on nothing but this, claim it's very complicated, impossible to reproduce how they do it. How would you address some of those sort of counterpoints. Sure.

So on the screening side, this is one where we are not the experts. We work with an amazing partner in TransUnion and Assurance, and they're, they're really the experts in there. We work hand in glove with them. They are constantly looking for new ways to make the process faster, to make it more comprehensive, to bring— even helping to bring more counties online. But you're right, in the United States, there are counties who don't digitize their court record, and as part of that, Somebody goes out to that courthouse on a business day, collects those records, brings them back. So part of that is having a great partner on the credit criminal and eviction side that we can work closely with, continue to iterate in the way that that information is pulled more quickly and displayed to our customers. And on the verification side, there is a lot of nuance specifically to property management that we've been able to kind of build into the application process, A, from coming from property management, and then also B, from having this really been in the works for almost 2 years in terms of building out our application process, really determining what works, what doesn't. There's a fine line to walk as well with— if you lock things down super hardcore, don't allow anything to come through other than the exact match of what you need, you'll ultimately end up with frustrated prospects who may otherwise be qualified to rent from you. And if you're too loosey-goosey with it, you'll allow in fraudsters and your eviction rate will go up. And so we've been fine-tuning what that line looks like, specifically around interface design. And I think this goes back to the beginning of our conversation here is that interface design and having something that's really been battle-tested, works quickly, is smooth, really makes a ton of difference when you're working with people who are at that moment in time giving you their most sensitive information. And so really getting great on the design side of things so the prospects feel comfortable uploading what we need them to. Then in real time, we verify that information. We work with great partners. I won't claim that we're an expert in everything., but there are companies and partners out there that we work with who are bona fide experts in ID verification, and they've seen millions of IDs and selfies. Same goes with document analysis, connecting bank accounts, connecting payroll accounts. And then our job here is to bring all of that together in one place so the property manager can make an educated decision as quickly as possible.

Okay, got it. Yeah, that, that makes sense. Tell me about pricing, your product pricing. I actually haven't— we're, we're customers and, but we, we haven't looked at the pricing in a while, so How do you price your product, both the, the, the base product and as well as the application screening?

So for the RentEngine leasing platform, we took a little bit of a different approach here. We price per listing one time when it's put out on the market. So new property comes available in your portfolio, you want to start advertising it through RentEngine, it's $45. And that property then gets the full RentEngine experience all the way through. Regardless of if it stays on the market for 2 weeks or 2 months, that's it. It's just $45 one time. And we found that was way more aligned to the incentives of our property managers and the way they operate than charging per unit per month on listings that aren't even available for rents. And so it was a little bit of a weird approach, and I'll be honest, the first 6, 7 months we spent a lot of time explaining to people, this is how it works, this is what you can expect to pay. But I think over time it became the realization that this is way more closely aligned to my incentives because I get paid for leasing by the owner. And so I want to tie it to those cash flows. And it feels almost punishing for me to charge, for me to get charged on listings that aren't even available for rent, even though this is a leasing product. So that was kind of our core thesis there and has become the bedrock of how we do our pricing today. And then on the application side, we charge all in per application processed. For kind of full credit, criminal eviction. Typically that price is in the low $30, includes the ID verification, income, et cetera.

Got it.

Yeah.

And I, I do like that pricing model. I love the way those incentives are aligned because when you, when you, RentEngine are charging flat fee at the moment of listing, your incentive is let's get this property leased and off the market as fast as possible because the longer a listing is on the market, the more costs you're incurring technology-wise, customer support-wise, and everything else. So your incentive is like, hell yeah, let's get this thing leased and back off the market so we can sort of— it's almost like turning inventory or something. It's like a really interesting way to do it. Is your AI product, is that extra or is that built in? Or I, I sort of forget the details there.

So we, we had a lot of internal debate on this, but we realized that the direction leasing was going is AI being able to help those prospects immediately from the moment they inquire through the showing process and then afterwards as well, even while they're working on their application. And so we do not charge for text AI. You can have RentEngine, the AI responds to text, it helps leads through the process, helps them schedule at no additional cost. On the voice side, we do charge a small per minute per per minute fee simply because the costs to run voice are significantly higher than text. Um, and we do pass some of that through, but for the text, which is the primary channel and 75% of all prospects never pick up the phone to call, so they're just doing everything via text, that's fully included.

Okay. And if I remember right, you guys have not raised any money. Is that still the case?

That's correct.

Okay. So bootstrapped and You're not like, you know, spending down some multimillion dollar investment where suddenly when it runs out, you're gonna have to raise the prices and all that.

Yeah, we did. We've not taken on venture capital, VC money. We've also not taken on any private equity money, kind of fully just building this for our customers with our customers.

Cool. Love that. How does it work with the AI models on the backend? Like, are you guys just like plugged into Anthropic's API or something for some of these voice and text and email? AI responses and commu— and conversations?

So this is constantly evolving for us, but we use a mixture of models for each part, and we do have voice AI, we have text AI, we have a lot of AI just in the platform as you're using Rant Engine to make things faster as well. And so with those, we're working with the big model providers, so OpenAI, Anthropic, really constantly evaluating which model is the right fit for this specific use case and staying at the cutting edge with them because we realize that The product we're able to offer is gonna get so much better as the models continue to evolve and get better. And so we want to deliver those cutting-edge models to our customers because the more human-like it sounds, the higher those conversion rates are gonna be, which ultimately means the leasing's gonna be faster.

What's your, what's your monthly AI token spend in terms of dollars?

Probably close to the tens of thousands.

Wow. Nice. And have you looked at all, or would it ever make sense to do like a local model thing? I think, feel like those are becoming potentially more viable, or at the scale you're at, it would be crazy.

It wouldn't be crazy, but it would take us out of getting the most cutting-edge models and applying them to leasing because the open-source models tend to be 6 to 9 months behind for certain tasks or even further behind. And so right now, right here, and we're constantly evaluating this. The models from the top frontier labs are the best ones that we should use.

I mean, I feel like, for example, just a routine leasing conversation over text or email, I mean, that does not need a frontier model though, right? I mean, there's, what's your application fee? Do you accept pets? Like that's, that could have all been handled by ChatGPT 2.5 or whatever.

It does and it doesn't. And the difference really there becomes the The tone of the model and really how natural it sounds. And as the models get better, they sound— there's less sycophancy in them. There's less hallucination. They sound more real and human-like. And ultimately, even though we're not going to be doing linear algebra in real time with the models, being able to sound more natural because this model is better trained not only on mathematics and science, but also on human language, we can then pass that value and that kind of real lifeness to our customers.

Do you have to deal with, like, I've read some funny stuff on the internet where people like realize that some of these chatbots are powered by Frontier models. And so like instead of paying for ChatGPT, they just like pull up the Domino's customer support and they're like, I'm planning a trip to Bermuda, please help me select flights. Like, have you seen any of that come through?

I, I, so early on we did see people try to exploit that. To this day, Chipotle, I saw last week somebody had made a Chipotle bot that would effectively, anytime you had a coding problem to solve, it would just go to Chipotle's website and feed it into their chatbot because it was using a Frontier, I think, Anthropic model.

That's sick.

For free. Yeah. I love that.

Okay. I have to ask, how are you guys releasing new features so fast? I mean, I don't even have time to read the emails that are coming out once a week and you guys are actually implementing the product upgrades and improvements, what is going on over there at Red Engine that you're able to release new features on this cadence? And I see almost nobody else in our industry doing that.

It all starts with culture. And from day one, when it was just me and Lior tapping away at this, we kind of set the culture of we need to move as quickly as possible in order to kind of stay at the cutting edge of, A, what's happening in industry. And B, to serve our customers. And so unabashedly, we are a product-first company. Our sales team knows this, our marketing team knows this, our customer support team knows this. They know that product is number one. That is how we deliver the best experience for our users. And so that also flows through the way we do engineering as well. Our CTO, Lior, comes from property management. He has that experience. He's also a phenomenal software engineer. And we keep the team intentionally tight. We don't hire a lot. We really only hire when there's a burning need. Because the, the kind of, the complexity grows exponentially as you add more people to your engineering team. There's more people involved, more fingers in the pie. And so we keep that intentionally tight, 100% product focus with a CTO who has great kind of product sense and instinct. And then my job as CEO is just to continue to expedite and move things faster and faster and faster because we know that that's how we build a compounding advantage. That's also how we can keep our customers at the cutting edge. So It really just starts from culture. And then every time we get together as a team, every time we hire, this is the through line of product is number one.

Love that. And it's, it's really working. I mean, it's remarkable and inspiring, honestly, to see that changelog come through on a weekly basis. And I wish I had more time to like read and absorb everything that's happening, but it's, it really like, it feels exciting, right? As from the customer perspective. It feels exciting to see that momentum and progress, even if none of those features on any given week matter to me with what I'm doing for whatever reason. Just knowing that somebody is paying attention and kind of cracking the whip over there is, is really cool. And, you know, I love this for, for property management operators because so many of the technology products we use every day have stagnated and have really slowed the pace of feature releases, bug fixes, visual improvements, quality of life improvements, when it feels to me like that should be accelerating, if anything, with all the AI coding tools that are available now. And like the AI testing and like, I mean, I can spin up tiny little apps left, right, and center just here on my goofy little desktop. And these guys, it seems like things have slowed down. So just, it feels refreshing and it feels invigorating to me to know that this is actually possible. I'm not crazy. It is possible to release features on a fast cadence in our space. And so it's, it's just very cool.

My goal is that when somebody buys RentEngine today, it will be 2 or 3 times better a year from now, and they will feel like, wow, I'm very glad I got on the ground floor of this product. It continues to get better, and also it continues to be built around me and people like me. We're very close to our customers in terms of the features that we build. The ones you see released on Wednesdays almost always come from, I can tell you exactly which customer was like, I think this would be really useful and it's useful for others as well. So let's go ahead and build it. Let's ship it this week. And hopefully this is pushing the industry forward as well so that they can continue to build other players in the space, can continue to serve their customers and kind of give everyone a kick in the ass.

Yeah. Can you tease any upcoming product direction, feature releases, anything you're working on back there in the labs, uh, that's in beta or like, you know, any, what can we look forward to this year?

So last week we rolled out the market tool and it was originally in beta. It's now fully publicly launched. And what this does is it allows every property manager to have a fully powered rental comps tool directly in RentEngine. So from the same place they're doing leasing, setting pricing, Looking at data, they can analyze what are the market comps around my property? What does supply and demand look like? What trends can I expect in the next 1 to 2 months? And ultimately, how can I price my property today by looking at all the comps that are available, apply my local knowledge, and then use that to get the price instead of it just spitting out a price based on the average rents for 3-bedroom homes in your neighborhood. This is one that's been in the works for a while, and we really see this as the next step forward in leasing. So if RentEngine covers the end-to-end leasing, this would be at the top of the, top of the process is how do I price my property correctly? Because we see that mispriced properties tend to have about 2x the days on market. That's what we saw in our latest Q1 report. So how do we give the property managers the right tools, fully integrated in the most convenient way possible to be able to run that pricing effectively and have the firepower to go to their clients and say, hey, Based on my local knowledge, based on these comps, we need to be pricing at $50 lower.

I love that. I mean, that just makes intuitive sense that the tool that you're using for listing and leasing would also have a built-in market rent analysis component. That seems logical now that you say it. It's surprising we haven't seen that before. Great market tool. Sounds awesome. Anything else coming out this year that we can look forward to?

So there's going to be a big release in the early fall that goes back to when we were talking about e-commerce here a moment ago around remarketing to those leads. Those are your leads. They're in your CRM database. How can we give you the tools by text and by email to nurture those leads, to let them know when matching properties come to market so that 10 months later you can also reach out to them and put them in a cadence to get them re-engaged with your properties? And so this to us is like the real leveling up of how we get you kind of get property managers really taking advantage of their lead database.

Love it. That'll be really exciting. Well, Alex, this has been a really fun conversation. I love following along with what RentEngine is up to. For people who want to keep up with what you guys are doing, where can they go to sign up and learn more?

Yep. Head to rentengine.io or just Google RentEngine. You can catch our latest feature releases up there, learn more about the product. And stay in touch with us.

Awesome. Well, thanks for coming on the show, Alex. This is great.

Thanks for having me, Peter.

I hope you have enjoyed this episode. If you like the show and want to get connected to the community, you can follow me on Twitter @PSLohmann and subscribe to my email newsletter on my website, PeterLohmann.com. I try to share as much valuable property management content as I can on a regular basis. Thanks again for listening and have a great week.