25A – What’s Next?

25A – What’s Next?

            After interviewing three different consumers in my target market, it was surprising apparent that they all came to the same conclusion. When explaining to them my business model of semester-based rent for an apartment complex, they all had the same idea. More apartment complexes, and more cities. Grow our presence in Gainesville, transition from one apartment to several, then ultimately transition into an entire new college town or city where you do the same thing.

            These interviews created an eye-opening response. I did not expect my plan for growth to be so predictable and expected- They basically said exactly what I planned to do. While I still plan to grow in this way, it has led me to think outside the box in ways I haven’t previously. The new path for the future includes these aspects, but also includes new ways to increase this growth such as offering our product in cities that are not as college dependent as perhaps there is a desire for short term leases in more places than just college towns.

            The primary goal is to open more apartment complexes, expand our real estate portfolio, and carefully select more college towns similar to Gainesville to infiltrate. However, once this is achieved, we will market this service/product to people outside the realm of college. Perhaps someone who has a short-term job or is working on a project in a city. Perhaps someone just does not want to commit to a long-term lease. There is a chance this product is marketable and desired by non-college students, and it would be a missed opportunity to not jump on it.

            The new market concept would be offering a brokerage service between businesses and consumers. Instead of having to sign a one year lease and find someone to sublet for you, we will sign the lease and offer a sublet service to individuals. Using our large network developed by the business we can outsource more people looking for short term leases and make a small premium. This eliminates the hassle for the business and the renters, making them both likely to agree to this with us. After speaking to two leasing agents at different apartment complexes, it seems like this idea was a good one. They both agreed that the apartment complexes would like the security of having a reliable tenant such as ourselves for the lease that would decrease their stress to reach max occupancy. They see it as a no brainer as it would be the same income for them with significantly more security. Additionally, they charge a sublet fee in the first place, and said they could likely eliminate that and we could use it as part of our compensation for the service.

            Reflecting on this new market concept I am more surprised than anything. I did not expect these leasing agents to be so excited by the idea. I would have thought it was discovered before, or they would have no use for it, but I appear to be wrong. It is also mildly concerning the lack of confidence they seem to have in their leasers consistently and reliably paying their rent. This however works in our favor as it increases their incentive to work with us.

            While many people would be discouraged by the premise of leasers not paying their rent, this does not bother me. It is my opinion that this is a result of an inadequate product. A majority of these defaults are results of people being fed up with their commitment to a lease when they are not around. I think people would be willing to pay a slight premium to us to not have to pay additional rent in months they are not around.

            At the end of the day, this new market is certainly not as attractive as the existing market. While it may work as a business, there is absolute certainty in my mind that it would not be as profitable as the existing business. It may be an excellent back end aspect of the business, but certainly will not be the primary focus of the business anytime soon.