This article was originally published on Tallinn Science Park webpage on 26.04.2021
A few weeks ago, Bidrento, a start-up company participating in the Tehnopol Startup Incubator program, raised a six-digit amount to expand into foreign markets and grow its team. The property management software they create helps automate manual operations and provide support throughout the rental cycle. The solution is designed for rental property owners, managers and brokers and allows users to manage four times larger rental portfolios with the same number of people. We talked to the founder and manager of the company, Taavo Annus, about their current journey and the real estate scene in general.
What problem is your company solving?
Today, many landlords use Excel and Google Drive to manage rental properties – a lot of manual activity that takes a lot of time. Owners of larger rental portfolios also spend a lot of time onboarding the tenant, booking viewing times, concluding contracts, and checking the tenant’s background. Larger rental apartment owners and managers today use up to seven tools to get their things done – we have been able to combine these tools into a single management software. Bidrento automates the preparation and signing of leases for landlords, brokers and administrators, background checks for tenants, sending rental invoices and utility bills, receipt control, debt management and facilitates other day-to-day administrative tasks. This allows rental property managers to spend less time on manual paperwork and focus on growing their business. We recently interviewed a couple of clients who found that our solution helps them be more than fore times efficient with their time.
How did you come up with such an idea?
About two years ago, we came to the market with a solution for landlords, where we offered the opportunity to advertise, do a background check of the tenant, and the conclusion of a contract, which turned out to be a powerful tenant real estate management software. Clients themselves approached us with their concerns, and through that, we saw their concerns about management and other activities – they directed us to where we developed. Although today we also have several clients who manage mixed portfolios with commercial and residential real estate, the main focus, in the beginning, has still been on residential real estate.
Where did the interest in the rental market come from?
From the background of the founders – Natalja Napsep has worked in the real estate field for a very long time and has been engaged in the development and sale of residential real estate and the development of rental houses. That is where the same troubles arose and our development began.
How has journey been so far, have you had any major obstacles?
As we all know, raising money doesn’t take a day or two, it’s a separate process that can take months. This has not been a direct problem or obstacle, but it must always be taken into account. Sure our company could grow even faster than it is now and be represented in 10 countries. However, we have not directly had any major concerns, rather just a daily startup life.
How does your daily startup life look like?
Previously, I have worked in large corporations, where I’ve had certain tasks and goals, but in startups, things can change in weeks or days. Because the team is small in the beginning, people are responsible for many activities, the focus must be kept in place at all times, and each person has to deal with many things. It’s not just that one person is just selling and the other is marketing – everyone needs to see the bigger picture.
How has the Startup Incubator supported you along the way?
We have had some good meetings where we could practice pitching with other teams and give each other feedback – it was a very valuable experience where we got good feedback and made great progress. You can also contact mentors, ask questions and discuss various topics from law to UX.
What would you recommend to those who are currently considering joining an incubator that is worth keeping in mind?
We have seen that the best results definitely come when the whole team contributes full time. Then the mentoring and other things also have more value, because if you just do monthly sessions without further steps, most of the new information will be lost. The incubator can be a support if the teams develop further on the basis of this information. As start-up teams are usually smaller in the beginning and do not have all the know-how themselves, it is very good to get it from the incubator.
There has been talks in the media recently about how real estate prices have risen quite high, and young people are at a high risk of being constantly trapped in renting without buying real estate. How do you and the team see the Estonian real estate market?
Rental real estate has become very popular in recent years. I think that an Estonian person is has strong faith in real estate – rental real estate is seen as pension. I also see in my circle of friends that many have bought one or two rental apartments. Our clients with larger portfolios are also steadily increasing their portfolios. There is a fairly active acquisition of rental real estate – people take it as a real asset that generates cash flow and could be an additional source of income in the future. The trends are also the same in general – the population is growing, for example about 3000-5000 more people come to Tallinn every year and they need to live somewhere. Residential real estate is not being built fast enough, which is why some people are in the rental market in the first stage. This is how people live for a few years, and when they see that the city turns out to be a permanent place of residence, they look into buying a home.
Fortunately, the situation is still good in Estonia, but in general, real estate prices have started to grow. Looking at Europe’s major cities, residential real estate has, in fact, reached a level where many people are already unable to afford housing and remain in rented accommodation on a permanent basis. This tendency is definitely also visible in Estonia – real estate is becoming more expensive by 3-5% every year. Soon we will reach a point where many can no longer buy real estate and remain in the rental market. In Germany, for example, there are restrictions on rental prices in certain areas, above which the tenants cannot ask rent. Fortunately, there is no such situation in Estonia yet, but maybe we will reach this point someday.
How do you envision the Estonian real estate and rental market in ten to fifteen years?
Already in the last few years, funds and institutional investors have emerged to build entire rental houses, but this will certainly continue. Small investors and entrepreneurs can also start doing the same. This will also create a more professional landlord’s offer to the market. Larger developers are definitely very good landlords in terms of their services and offer a good rental experience. The share of co-living is definitely growing, where the rental house also has table tennis, yoga classes, and gyms, etc. The younger generation expects all sorts of different options for a rental relationship, as with any other service – a good customer experience is expected. There are also various smart solutions (eg smart locks) that are already being used more and more actively.
Where would you like Bidrento to be in five years?
We have quite big goals, we see whole of Europe as the first big market – we want to be the number one choice in terms of management software in our customer segment. We also want to approach another continent, such as the United States, because, with a cloud-based solution, national borders do not create special obstacles for us, and residential rental real estate is quite similar from country to country.