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A London startup is attempting to disrupt the local property rentals market in a way that benefits tenants, landlords and property agents equally – a win-win-win scenario, you might say. Jock Busuttil finds out more from the man in the Wigwamm, Rayhan Rafiq Omar.
It’s a bright, frosty morning in the middle of a London winter. I’m sitting in the window of a coffee shop in Wimbledon waiting for the subject of my interview to arrive. He’s not difficult to spot. Dressed somewhat incongruously for the weather, a man wearing flip-flops, a light, summery suit and an equally summery smile walks down the high street and joins me. When asked later about the flip-flops, he replies, “If I dress like it’s Summer, then maybe it will come along sooner”.
I’m speaking today with Rayhan Rafiq Omar, a man with method in his apparent madness. So, to know that he has set himself the goal of changing the behaviour of the property rental market through his startup, Wigwamm, it’s a fair bet that he has a good reason for believing he’s going to succeed.
“The property space hasn’t seen any innovation since people took classifieds online and people got paid to generate leads. And that’s been the status quo for the last ten years,” claims Wigwamm founder Rayhan Rafiq Omar. With over twelve years’ experience with his family’s property management business, he’s no newcomer to the challenges of operating in such a traditional market and what it’s going to take to disrupt it. Similarly, he’s no stranger to tech startups, himself running the popular pitching practice meetup, Flagons Den, until recently.
So how is Wigwamm going to be different to Rightmove or Zoopla?
“Zoopla came in four years ago saying all the right things – ‘the market’s broken, it’s horrible, we’re going to innovate’ – but look at their website, their business model, they’re a complete copy of Rightmove,” he explains. With Wigwamm, Rayhan is claiming a loftier goal: to change the rental market in a way that solves people’s problems.
Rayhan’s top tips for startups:
1. This ain’t no get-rich-quick scheme. Most successful startups took four years to achieve product / market fit.
2. Don’t be a stealth startup. Tell people what you do if you want to determine whether you have product / market fit.
If you’ve ever attempted to rent a property in London, I’m sure you’ll appreciate the process is far from hassle-free. For the uninitiated, you’re typically under the time pressure of a four or six-week notice period to find somewhere else to rent. First you spend half your time chasing phantom properties because some mug hasn’t updated their online listings, possibly deliberately. Then you’re literally and metaphorically taken round the houses by an agent, who often sees you more as a commission cheque than a person. So you end up being shown a bunch of properties that frankly are of no interest to you and, in some cases, should probably have been condemned.1 And then they take you to the one decent property that was really the only contender to begin with and gives you the hard sell. What a pain in one’s respective genitalia.
Rayhan sees a very different process, designed around making life simpler and easier for the prospective tenant. “If you’re looking for a place to rent in Wimbledon, you’re only really going to look for a place in Wimbledon. So this is why we’ve come up with an auction which is just for local rental property.”
Hmmm, sounds suspiciously like another startup with an eBay approach. Not so, according to Rayhan. “An auction allows for transparent pricing, for all the people looking to bid on all the available stock at a certain point in time, but not like on eBay. eBay is the worst auction in the world. eBay auctions fail [to achieve a sale], everyone knows that. eBay’s not creating a market, it’s just lowering the threshold of entry into e-commerce.”
So how else will Wigwamm differ? Well, for starters, there are no phantom properties here. This is confirmed in advance by the Wigwamm team, who not only visit the property, but also take gloriously detailed interior photos and map the rooms properly. This also helps to drive Wigwamm’s very photo-centric browsing experience so that prospective tenants can get a much better feel for the property without having to take time off work to view duds.
“All the property that goes in the auction is available to view for two weeks,” Rayhan elaborates. “At the end of those two weeks, on a Monday night at 7 o’clock, you’ve gone through seeing stuff online, viewing it in person, getting referenced in advance for free, and then bidding on the Monday night. You’ll have all the information that you’re likely to ask about, like whether the landlord wants pets or not, what the bill amounts are for that property, so that you can make an informed decision about your home, not just do something quickly, feel under pressure and put in an offer.”
The auction itself really is quite unlike eBay. You can see what the rental price is at all stages, as well as whom and how many people you’re bidding against. And unlike eBay, the auction always ends with a confirmed rental at the best market price. By staying local, Wigwamm is ensuring that supply doesn’t outstrip demand. Sure, this means that some of the less desirable properties will go for a lower price than the landlord was hoping for, but this is still far better than letting the property go empty, with the landlord still having to pick up the bills.
The auction process stops agents setting the market price with only their gut instinct to guide them and lets the market regulate itself. This gives Wigwamm another potential direction for the future: assuming they’re successful and grow, they’ll be building up the first database of realised transaction pricing in rental property, unlike Rightmove or Zoopla who only can see the marketed price.
So does this mean the end of wide-boy agents? Sadly not, but it may well lead to a cull of the less-reputable ones.
“Wigwamm works great for the agents, because it frees their time from tenants, who don’t pay them money, and allows them to spend more time with landlords who do,” Rayhan explains. “When an agent gets a landlord through the door and agrees a fee, they’ve made the bulk of their fee. If they get £100 more in rent, it doesn’t really make much difference to the agent’s fee, but it makes a big difference to the landlord. There are tens of thousands of agents. That’s too many. If we can show transparently which agents are the ones people trust, the number of agents will decrease, those fewer agents will be phenomenally more profitable, and they’ll offer better value-added services because they won’t need to do this whole thing of messing tenants around and getting the first offer through the door.”
Rayhan sees things working quite differently, not just in rental properties, but beyond. He wants to shake up the mortgage market next, mainly because he wants to bring more liquidity to property sales. His reasoning is that the British economy is heavily based on land and property ownership, so to restore economic confidence, the property market needs to be unlocked.
He sums up his own motivations best: “The last generation did everything it could to enrich themselves. Now it’s our jobs to take the education we’ve got and put it to good use. We’re not here very long and we take no knowledge, no wealth with us. All we leave behind is what we did here, and that’s why I’m doing Wigwamm.” It’s hard to argue with that, even if the man insists on wearing flip-flops in Winter.
Jock Busuttil interviewed Rayhan Rafiq Omar in January 2013. To find out more and use Wigwamm, have a look at their demo at Wigwamm.com and visit them on AngelList.
- I once was shown around a property whose roof had partially collapsed earlier in the day, and whose current tenant was exhorting me to avoid renting the property at all costs. The scene was so desperate, I was slightly surprised not to see burning mattresses being hurled from other windows in the block. ↩