After having been both renters and landlords, two Calgary entrepreneurs wanted a better way to match the two sides while providing an incentive for good tenants to stick around.
Brothers Mike and Scott Andrews of Yaldi Renting, a residential renting platform, said one of the most common things they’ve heard from Calgary renters is that they don’t rent because they’re not getting any equity – they’re just paying a landlord’s mortgage.
“In our experience from being both renters and landlords, is they don’t realize how much value is in just being a great renter that doesn’t bug you a lot, just pays the rent and is generally easy to deal with,” said Scott.
“There’s a lot of value to be had with that. We’re trying to give some of it back to the renter.”
Walk a mile in each other’s shoes
The idea came to the pair after both had been renters and then, later, landlords.
“We ended up getting a really great tenant, a great family, who basically took better care of the property than we did when we lived in it,” said Mike.
“When the time came to look at increasing the rent to keep up with the market, we decided we just wanted to keep the good relationship with them.”
So, instead of bumping the rent $100 a month, the Andrews brothers kept it steady. They felt that by keeping that $100 in the renters’ pocket, there was loyalty built up and it was essentially ‘paying’ them to stay in the rental.
“Then we thought, “I wonder if any other landlords do this?’” Mike said.
They developed a platform where they could connect quality landlords with quality renters and incentivize the high-quality relationship for renters.
Once on the platform, renters can search properties and will have the ability to compare landlords – landlords will be able to do the same. Once a deal is struck, seven per cent of the monthly rent goes back to Yaldi.
Three per cent is held (four per cent is the Yaldi fee) for the tenants. That’s paid back to them at the end of the lease. Tenants can get between $500 and $1,000 back annually.
“You’re basically paying the tenant to take good care of the property, and not paying a property manager to babysit the tenant,” Mike said.
Final touches on the platform
Right now, the Ontario-born pair are optimizing the system with a few initial participants. They’re building out the full platform from the current beta version.
The idea is to test, learn and perfect in the Calgary market. They came to the city together a few years back, after Mike had first asked his brother in 2013. He was doing his master’s degree and asked if he wanted to go. Their younger brother (not in the business) joined them.
They want to work out the wrinkles here in the city before rolling their system out to other markets. In five years, they hope to be across North America and into the UK.
They said the Junction program is helping them identify “blind spots” for their business as they get it ready for launch.
They’re enjoying the process working together. Growing up they moved a lot.
“Every time we moved, we had each other,” said Mike.
“You just tell him exactly what you think, and you don’t have to sugar coat it at all. He tells you what he thinks, and you have an argument about it. The next minute you’re fine.”
And they enjoy the perils of start-up life.
“You’re free to take it the direction you want,” said Scott.
“There’s a bigger vision that you’re helping to work toward.”