How Renewing My Lease Ruined My Life

STOP BUILDING REAL ESTATE TECH

Today I experienced a lease renewal process so absurdly broken that it nearly sent me into an existential crisis. And it perfectly illustrates why most PropTech deserves to be launched into the sun.

If you're reading this, there's a good chance you already know that I'm a Real Estate Tech founder (my reach isn't that big). Well, it is from this position that I can positively assert that most Real Estate Tech (aka PropTech) makes the whole real estate industry (and probably the entire world) 10x WORSE.

"Jackson, you're being dramatic." Yeah sure, whatever. But you're still reading, so stay with me.

When I say that renewing my apartment lease today may have been the single catalyst that ruined the rest of my life, I mean it. It also perfectly showcases why the majority of people would rank PropTech as the second most detestable technology vertical, only slightly above autonomous kamikaze drone swarms.

My Real Estate Street Cred

To show that I'm speaking from a deeper position of authority on this, let me give you some more context on me:

I've lived in New York City for 8 years now. In that time, I've lived in 7 different apartments, each in a different neighborhood. In order: Chinatown, Union Square, West Village, East Village, Upper East Side, Upper West Side, and now the Lower East Side.

On top of all of this, I worked as a real estate agent full-time for several years.

The point being, I should be something of a pro at this game by this point. I've been around the block. Multiple blocks. In multiple neighborhoods. I've seen how the sausage is made from both sides of the counter.

Obviously, finding an apartment is one problem (for those new here, Relm AI is the solution for that), but let's just talk about the lease signing process for the moment.

The Good Old Days (Last Year)

When we moved into this Lower East Side apartment a year ago, I went into the leasing agent's office, signed a physical lease, and walked out.

Sure, old fashioned, but aside from the travel time to get there, this is pragmatically a fully optimized process. Pen, paper, keys, handshake, done. It was a crude process, but it worked and some part of me kind of loved it.

But today we renewed...

Unfortunately for us, sometime in the last calendar year our landlord had been convinced by their rental payment processor to use their software (if you can call it that) for leases too.

Now, I don't know who built this God-forsaken SaaS platform (which shall not be named), but I'm imagining a very punchable face.

The following is the new process which I, as an extremely tech-literate tenant, went through with this new leasing "solution":

1. Our landlord texts me to let me know that they sent over a new lease

2. There's nothing in my inbox

3. They say I can find it in the "documents" section on the rental payment portal

4. I open my laptop and login, but there is no "documents" section

5. They let me know the "documents" section is only available on the mobile app

6. I begrudgingly download the iPhone app

7. I login on the app and have to verify account on my desktop browser

8. Finally logged in, I find the lease renewal, but there is no way to sign on the iOS app

9. The landlord says the app is only for document sharing, we still have to print it out, sign it, and mail it to them…

Let that sink in.

So instead of going to an office and signing a paper lease, I now have to:

• Download a single-use iOS app

• Create an account

• Download lease on my phone

• Send the lease back to my laptop

• Find a printer

• Print out the lease

• Sign it

• Find an envelope

• Mail the lease to them

Halfway through this Kafkaesque nightmare, I asked if I could just come to their office to sign it (it's a 15 minute walk from me). They said no, because they have an exclusivity agreement with this leasing tech company.

THIS is what happens when the new school tech ethos of "find a niche problem to solve" gets applied to the old school, physical world of real estate. It's also why 1) most real estate tech companies fail quicker than average, and 2) why most consumers HATE these aforementioned PropTech solutions.

The Silicon Valley Approach Doesn't Work Here

Now, my petty ramblings aside, this relatively low-stakes lease renewal disaster isn't just some isolated frustration. It showcases a fundamental first principles error in how tech thinks about real estate. 

How does tech innovation or “disruption” usually work? 

Silicon Valley's standard playbook is to find an existing system, identify a problem at a single point in that system, solve for that one component, and thereby make the whole system better. This works really well for many, maybe even most industries.

But it fails spectacularly in real estate.

Why? Because real estate is a periodic system, not a continuous one. The industry itself is a function or "program" which operates only when something changes, not a continuously operating process. Each transaction then necessarily has to be its own closed ecosystem. The whole system works even with inefficient parts simply because all those parts are unified in their inefficiency. The process produces the outcome it was collectively designed to.

However, when someone comes in and tries to "improve" a single part of the process, it's like trying to replace a piece of an old reliable truck engine with the circuit board from a Tesla Cybertruck. It won't work because you now have parts that don't work together. Like, at all.

Congratulations, PropTech entrepreneur, you've succeeded in making the problem worse!

The Fractured Ecosystem

Don't get me wrong, the real estate system is still super inefficient and in desperate need of improvement. This hasn’t happened yet for one exact reason: no one has been able to upgrade the transaction process in its entirety. 

The last company to do anything like this was Zillow when they launched in 2006, taking the entirety of the home search process online from literal paper listings all in one foul swoop. 

Since then, every tech entrepreneur has been trying to fix additional pieces but failing for the reasons I just outlined.

What we've ended up with is a graveyard of constantly failing smaller software solutions all fighting for their place in a totally disjointed and still stubbornly offline process. One app for applying, another for touring, a different one for payments, and 157 others for random other parts along the way.

There's a reason why PropTech startup funding had one of the sharpest single-year declines in venture capital funding of any vertical except for maybe crypto (that's a whole other conversation). Venture capitalists rightfully went from “let’s fix real estate!” to “wow, all these companies really suck at fixing real estate” in record time.

To paraphrase a meme I saw on Facebook (maybe Tumblr?) back in the mid-2010's: I've got 17 browser tabs open, I don't remember what 5 of them were for, 3 of them aren't loading, and I can't figure out where the music is coming from. 

Why We Hate PropTech: The Psychology of Uncertainty

What this fractured approach creates is headache-inducing uncertainty for anyone going through these disjointed processes:

• Is my lease online or is it in a filing cabinet somewhere?

• Do I need to make 3 Google-authenticated SaaS accounts just to pay rent?

• How do I put in an offer on a house I want to buy if I don't yet have a real estate agent?

Let’s talk psychology: People don’t actually dislike things that don't work very well. Contrary to what might seem obvious in the 21st century, inefficiency doesn't really bother us all that much.

However, what we all do hate (with the passion of a thousand burning suns) is uncertainty and unpredictability.

This is also why Zillow has been so impenetrable in the market for so long; in times of chaos, people fall back to familiarity, even if it is technically worse and functionally abusive to its users. 

With everyone else's tech creating uncertainty in the process, we fall back to the thing we know.

So far, no one has had a big enough vision, enough raw courage, or a productively delusional enough mindset to stage a full-on coup d'état against the old system.

What is needed for anything to change for the better is a hard swap of the transaction process in its entirety. Anything short of that is just adding to the uncertainty and making all of us continue to cringe at the idea of "real estate tech."

Indiana Jones and the Temple of Real Estate

Okay, how about a movie metaphor to wrap up this drawn-out manifesto.

In the famous opening scene of the original Indiana Jones movie, Indy gets the golden idol by hard swapping it for an equally weighted bag of sand.

He didn't cut piece by piece off of the golden idol and replace it bit by bit with sand, that would be dumb and would functionally ruin the treasure in the process. Instead, he took a deep breath and swapped it out in its entirety. The whole thing all in one go.

We cannot slowly swap out parts of the real estate transaction process. We need to upgrade the whole damn thing. Full stop.

This is what we need in real estate transactions, not a slow turn over in parts over a long timeline, but a damn COUP D'ÉTAT to get the change over with, with everyone all on the same page, moving in the same direction, together.

This Happens in Relm

To make this personal again, this is exactly what my company Relm is doing.

Yes, we started with search, but that's about as close to the top of the funnel as you can get. It's the piece that logically flows into all others. Everything else we build which Relm will expand into, now and in the future, will go sequentially in order along that transaction process.

One new and improved self-contained ecosystem. One process swapped entirely for another. One ecosystem, search to close, all in one place, built for the modern human. A coup d'état. A hard upgrade that needs to happen.

Full Circle

So, did signing this lease renewal become the catalyst for me starting my own real estate tech company? No –  we've already been working on Relm for almost 2 years now.

Did it finally give me an exposition of the problem I've had on the tip of my tongue for years but never quite had the words to say directly while pouring fuel on an already roaring flame in my internal engine, dead set on overhauling an entire $15 trillion industry? Oh yeah.

It also sent me down a mental spiral that led to me writing this article in the very apartment I renewed the lease for at 11pm on a Tuesday.

So yeah, I can't wait until you can one-click check out an apartment.

Download the Relm mobile app and join our coup: LINK

P.S. Yes, our rent went up (one war at a time, Jackson).