See the pitch deck a startup used to raise $4 million to buy, sell, and manage short-term-rental properties
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- Investors love short-term rentals, but they face pitfalls with property management and regulation.
- Rove, a marketplace and property-management startup, helps investors underwrite short-term rentals.
- Jonah Hanig, the CEO of Rove, walked Insider through the pitch deck Rove used to raise $4 million.
Short-term-rental housing exploded in interest among real-estate investors during the pandemic. Listings on Airbnb alone jumped by a whopping 62% since 2020, according to the short-term-rental analytics firm AirDNA, a sign that more investors were rushing to meet the needs of digital nomads and everyday tourists alike.
Operating a short-term rental property is rarely as easy as buying a property and posting it online, though, especially when considering the needs of remote workers.
Jonah Hanig said he knows this after spending months working from Airbnbs around the country with his fellow cofounders of the business-intelligence-software company Explo. Their struggle to find suitable remote-work spaces sparked Hanig’s idea for Rove, which offers short-term-rental owners property-management, furnishing, and design services.
Since founding Rove in 2021, Hanig has expanded his services to eight different markets, from New York City to Scottsdale, Arizona. The latest outgrowth of the business is a marketplace exclusively for buying and selling short-term rentals, because Hanig — the company’s CEO — saw that his property-management clients were looking to expand or reduce their portfolios.
The listings get into the weeds, but necessarily so.
They include verified income statements so buyers can see how well their investment might do, and explanations of local regulations, zoning laws, and homeowner-association rules that could throw wrenches into the rental process. Some local rules hung up Hanig himself after he tried to rent a co-op apartment in the highly regulated New York City.
He’s said Rove can help investors avoid similar — costly — mistakes, especially in restricted markets.
“In Park City, Utah, there are roughly 500 properties for sale, but only approximately 100 are in areas where you can use them as short-term rentals,” Hanig told Insider.
The marketplace will charge users a transaction fee — similar to what a broker does — with the goal of turning the buyer into a customer of Rove’s property-management business. The ultimate goal is to create “Zillow” for short-term rentals with the added feature of underwritng and valuing properties based on their potential incomes.
In some markets, the flood of new investors has resulted in oversupply, creating an “Airbnbust” for property owners counting on fast and easy bookings. However, Hanig said Rove hasn’t experienced a slowdown in its markets.
“We’re in a lot of supply-constrained markets, those with not a lot of housing stock and more challenging permitting processes,” Hanig said.
In 2022, the company raised a $4 million seed round from a range of founders and executives from companies like IndieGogo, ZocDoc, and Lattice. Hanig walked Insider through the deck that he used to help raise the cash.
See the deck below.
Rove pitches itself as the first marketplace exclusively for buying and selling short-term-rental properties.
Shopping for a short-term rental isn’t as simple as just buying the right home in a popular area — it requires wading through regulations and zoning codes.
Rove’s marketplace only includes active short-term rentals, which means that it can verify rental information for prospective owners.
Without the proper knowledge of local laws and the ability to underwrite a purchase, it can take months to purchase a short-term rental.
Rove collects “ready-to-rent” properties and can value them based on their income, in the same way firms value commercial real estate.
Rove makes its money through fees on transactions and property-management services.
This slide shows what the company’s revenue would be if it sold a $2 million home, and then managed it for four years.
The company sees a massive potential market in the short-term-rental game.
This chart of New York City neighborhoods shows how much more Rove-managed short- and medium-term rentals have made compared to average long-term rents in the same areas.
This case study shows how lucrative medium-term furnished rentals are compared to traditional rentals. By partnering with a family-office investor, this Rove-managed property made 69% more than comparable long-term rentals.
The company’s property-management wing offers homeowners the ability to easily book the property themselves, should they want a second-home experience.
Rove takes over the design and furnishing of the homes, as well as other traditional property-management tasks.
Guests have remote-work setups with office-quality monitors and chairs.
While the deck provides a sneak peak of Rove’s strategies, this slide highlights the actual customer perspective.
Rove also works with corporate customers who are looking for lodging for business trips.
The company is currently operating in eight active short-term-rental markets and has plans to expand its reach.
Many of the company executives come from managed-apartment and short-term-rental companies like June Homes and Kasa Living.
Axel Springer, Insider Inc.’s parent company, is an investor in Airbnb.