Do you remember how people used to meet realtors to choose a house to buy when a rental marketplace didn’t exist? Or book a hotel for a short stay when they are traveling?
Before the first rental marketplace was invented, renting a property was quite a big deal.
Today, people are able to find accommodation in a couple of clicks, all thanks to the rental marketplace business.
These days, just in the USA, over 36% of millennials live in rental accommodations.
At the same moment, working conditions have also changed due to COVID-19. Over 70% of employees started working remotely in 2021. Today, people spend more time at home than ever before. So we’re willing to improve their home conditions. This will result in higher business demand for using marketplaces.
In this article, we’ll tell you more about how to build a rental marketplace, its core features, what monetization models you may need, the main development steps, and pricing.
Step-By-Step Guide to Building a Rental Platform
Before starting the product development process, we recommend researching the market and target audience, picking the tech stack, developing additional features, marketing the rental platform, and thinking about providing excellent customer service.
Choosing a Marketplace Solution Type: Custom or Ready-Made
- Free and ready-made solutions to build a rental marketplace
The ready-made marketplace solutions are perfect for the quick development of smaller rental marketplace projects.
For example, it is convenient to use open-source and free construction tools when you’re sure that the platform you build is small or it is only needed for a free and quick representation of the product idea.
At the same moment, the ready-made free scripts aren’t suitable for products that need
- future customization
- growth in features
- handling high loads
- Custom development to build a rental marketplace
Custom development is suitable for marketplace projects that have specific business logic and customizable marketplace features.
In general, custom rental marketplace development may need more time and money, and payments than any ready-made solution when you build a marketplace. The table below shows preliminary estimates of the time needed to create a rental marketplace MVP.
However, as a result, it will be a fully functional marketplace where all the features and architecture are implemented according to your business needs.
Perform Market Research
Starting your journey involves conducting thorough market research. Taking a dive into the rental industry landscape will help you make well-informed decisions. The following steps are crucial for gathering insights:
- Identifying key players
- Analyzing market trends
- Understanding the regulatory environment
- Evaluating growth prospects
- Assessing competitors’ strengths and weaknesses
- Analyzing competitors’ customer reviews and feedback
- Identifying gaps in the market offerings
Consumer Behavior Study:
- Gathering data on consumer preferences and habits
- Conducting surveys and focus groups
- Analyzing purchasing patterns
- Estimating the capital requirements
- Analyzing revenue models
- Forecasting financial growth
Define Your Target Audience and Market
Determining your target audience is a stage that requires gathering and synthesizing different pieces of information to create a compelling value proposition. This process involves:
- Age groups
- Income levels
- Occupation sectors
- Identifying potential cities or regions
- Analyzing regional demand trends
- Considering logistical aspects
- Studying potential customers’ online behavior
- Analyzing purchasing motivations
- Understanding barriers to entry
- Dividing the market into distinct segments
- Developing tailored marketing strategies
- Crafting personalized user experiences
Choose a Technology Stack
When creating a rental platform that adapts to changes, it is crucial to choose the right technology stack. The key is finding a balance between being innovative and ensuring reliability.
- Choosing server, database, and application structure
- Selecting a programming language
- Integrating APIs and external services
- Deciding on a framework
- Developing user interfaces
- Ensuring cross-platform compatibility
- Selecting a cloud service provider
- Implementing data storage solutions
- Ensuring data security and privacy
Testing and Quality Assurance:
- Developing test cases
- Performing usability testing
- Conducting security audits
Sloboda Studio will help you pick the most appropriate tech stack based on your goals. However, you can pick the one that you can support later if you want to support it with your team. But we strongly recommend not picking the tech you don’t know what to do with, as it is necessary to support the system after the release.
Add the Core Features to Your Rental Marketplace
When developing the capabilities of your rental platform, it is crucial to prioritize features that enhance the user experience and ensure a seamless journey. It is important to pay attention to areas such as:
- Implementing filters
- Integrating smart search algorithms
- Ensuring mobile responsiveness
- Integrating secure payment gateways
- Offering multiple payment options
- Implementing fraud detection mechanisms
- Developing a calendar functionality
- Implementing real-time availability checks
- Integrating automated booking confirmations
- Creating user-friendly profile setups
- Integrating social media logins
- Implementing user review and rating systems
Develop Additional Features
Adding functionalities can give your rental management platform a competitive advantage. The objective is to improve user interaction by:
- Implementing machine learning algorithms
- Integrating user preference analysis
- Offering tailored suggestions
- Creating forums or discussion platforms
- Implementing a reward and loyalty program
- Offering interactive tutorials or webinars
- Offering user behavior insights
- Providing rental market trends
- Implementing real-time performance tracking
Mobile App Integration:
- Developing mobile applications
- Offering features like push notifications
- Implementing geolocation features
Channel Managers Integration:
Market Your Rental Marketplace
To establish a foothold in the market, developing a comprehensive marketing strategy is essential. Your plan should encompass aspects and include:
- Implementing SEO strategies
- Using social media platforms
- Engaging in content marketing
- Partnering with industry influencers
- Conducting webinars and workshops
- Collaborating for promotional events
- Creating press releases
- Engaging with industry publications
- Participating in industry events
Customer Testimonials and Reviews:
- Encouraging user reviews
- Showcasing customer testimonials
- Implementing referral programs
Make sure to plan your budget in advance here, as you’ll need to spend at least 50% on marketing activities so your platform gains users. This is a necessary part of any business as this is how you earn awareness and leads.
Provide Excellent Customer Service
Providing customer service and management is crucial for any rental platform to thrive. Make it a priority to build a reputation for being dependable, by focusing on:
- Offering 24/7 customer support
- Implementing multi-channel support (phone, email, chat)
- Providing FAQ and help centers
Feedback and Improvements:
- Encouraging customer feedback
- Implementing feedback-driven improvements
- Conducting regular customer satisfaction surveys
- Creating community forums
- Hosting community events
- Engaging users through newsletters
- Developing a structured dispute resolution mechanism
- Offering mediation services
- Implementing fair and transparent policies
By adopting a strategy that incorporates thorough management, market analysis, strong technological skills, and a focus on customer satisfaction, your business has the potential to flourish in the highly competitive rental platform market. These steps provide a roadmap for creating a platform that not only meets but surpasses user expectations, ultimately establishing a strong position in the market. It’s important to remember that success is a process of enhancing and adjusting to evolving market trends and consumer preferences.
Expert Tips for Building a Successful Rental Marketplace
Start Small and Scale Up as Needed
Starting a rental marketplace doesn’t mean you have to begin with an infrastructure or a multitude of features and deep management right away. It’s better to start with a foundation, selecting a few key functionalities that align with your vision and meet the basic needs of your potential customers.
As you grow and learn more about your user’s preferences and demands, you can gradually refine your platform by adding more features. Moreover, you should start scaling whenever you feel like doing so after you know that you are stable and ready to expand your business. There is no exact point where you should scale except for your own feelings and business management goals. This approach ensures that you expand at a pace that’s sustainable and aligned with your vision.
Scaling marketplaces often grapple with the “chicken-and-egg” dilemma: needing sellers to draw buyers, and vice versa. Scaling too fast on one side can lead to imbalances, either frustrating sellers with low sales or disappointing buyers with limited options. To navigate this, it’s crucial to balance growth, employ strategic marketing, stick to the management, and offer incentives to maintain harmony between supply and demand.
Get Feedback From Users
Establishing a feedback system with them is crucial to creating a marketplace that truly connects with your users. Once your marketplace is up and running, make an effort to actively seek feedback from your user community. This will help you understand their preferences, concerns, and expectations. It’s important to consider their suggestions and criticisms, as they can play a vital role in refining your platform to better meet their needs.
By implementing improvements based on user feedback, you not only enhance the overall user experience but also foster a sense of community where people feel listened to and valued.
Stay Up-To-Date With the Latest Trends
Moreover, in a changing and dynamic industry like the rental management market, it is not only advantageous but absolutely crucial to stay updated with the latest model trends. The rental market model constantly undergoes transformations due to a range of socio factors, technological advancements, and shifting consumer behaviors. Therefore, dedicating time and resources to monitor the market pulse will provide you with the understanding necessary to adapt and come up with innovative solutions. Taking this approach will enable you to maintain a competitive edge for your marketplace to thrive amidst fierce competition.
We have built and scaled over 20 marketplaces, half of which are rental or booking marketplaces. With our 10-year experience in marketplaces, you can count on our dedicated development team to build your rental marketplace in 4-5 months.
Moovle is an Airbnb-like accommodation rental startup headquartered in Belgium.
The main distinguishing feature of Moovle compared to the other online rental platforms is the expanded functionality for real estate agents. On the Moovle platform, agents can not only create their own listings with accommodations but also import their properties from other real estate resources.
As a result, the Moovle marketplace MVP was implemented just in 6 weeks and a customer was able to pitch the product to investors.
During this period, we started and integrated the external APIs to use listing synchronization and completely implemented the listing management mechanism.
Also, we implemented such platform features as:
- Accommodation listings
- Expanded search
- Property page
- Filters system
- Search personalization
- Accommodation requests
Umoozi is an online rental marketplace that allows users to book accommodations for vacations.
It was founded by a family of travellers that has explored multiple countries on different continents. They realised that most hotel accommodations are inconvenient for families travelling with children.
So, the client decided to build a secure platform allowing hosts to share their properties and travellers to enjoy quality accommodations easily.
In just 3 months, Sloboda Studio transformed the client’s idea into an MVP Airbnb-like marketplace.
We developed several functions to enable users to:
- list and advertise their properties;
- reserve or book an accommodation;
- make payments on the website itself;
- leave reviews about their experience.
We also built a mobile app that replicated all the functionalities of the web app. Our team significantly decreased the time-to-market and cost of building the web application with Sharetribe.
Sloboda Studio built the web and mobile apps based on the Sharetribe platform. We developed all the core features and integrated external APIs for payments within a short period of time, and on a tight budget.
How Much Does It Cost to Build a Rental Platform?
The cost of building a rental marketplace platform model heavily depends on the number of features and their complexity. Based on our experience building similar projects, the minimum viable product (MVP) of a rental platform software has the following features:
- Search Properties
- Admin panel
The cost to building the MVP for a rental platform with all these features starts at $40,000.
Want to build a rental booking marketplace
in 4 months?
Scaling is only possible when your product business is launched with all the necessary marketplace functionality and has its
- first users
- reviews and feedback
- platform fixes
Once your rental marketplace has it all, you can start scaling it.
But don’t rush – start by checking our article on how to scale your product platform first.
Rental Marketplace Business Model
Before you start developing your marketplace model for customers, make sure you know how you are going to need to monetize your marketplace to get the revenue and think about its business model payments.
In general, the 3 most popular monetization model are fees, advertising, and premium features for customers.
The marketplaces charge payment fees for transactions.
For example, Airbnb revenue model charges both customers and hosts a fee payment. Usually, Airbnb collects fees payments for every completed booking (usually about 3%). The size of the fee payment depends on the reservation pricing: the more expensive the accommodation is, the higher the fee payment is.
The renters also need to add non-refundable service fee payments (usually about 15%).
Advertising is a great monetization method for rental marketplaces’ business model. Nevertheless, no one likes too many ads. So consider ads your future monetization model, and start using it only when you’ve got loyal customers.
It is nice to collaborate with other services, such as car rental companies or tourist activities organizers, and place their ads on the rent platform for additional revenue payment.
Premium services allow the rental marketplaces software to earn money by offering additional features for payments.
For example, for accommodation rental services, it is possible to create premium listings of the newest housing or offer subscribers tourist activities they may need once they book a house for additional payment if it is a vacation rental marketplace.
7 Essential Rental Marketplace Features
When you start to build a rental marketplace business, it’s important to include only the necessary features in the software. Such an approach will help those who have already started to launch: it is possible to implement a product faster, outrun your market competitors, and be the first to represent your business to the investors.
Below, we have gathered the most common rental marketplace features any rental marketplace should have.
As usual, the sign-up and login processes should be performed by asking the rental marketplace customers for their email, name, phone number (optional), and password.
Lots of modern rental platform software also offer a free social network login, where the users of the business can enter the platform with their Google, Facebook, or Twitter accounts.
Trulia Registration Feature
Breather Registration Feature
Guest and Host Pages
Since any rental marketplace has at least two user roles, it is essential to diversify them by different abilities.
The renters may have the ability to look for accommodation and book the desired one. The homeowners should be able to list their property and specify all the required descriptions and details.
Breather Renting Host Account
Search and Filters
The search feature helps rentals users to specify the type of accommodation or the desired location.
However, the rentals search itself is never enough, especially when we build marketplace rent platforms for revenue.
Here, the more detailed the search results are, the better for the business. So we suggest including filters to use the advanced rentals search.
For example, allow rental marketplace users to choose
- property type
- certain dates of availability
- facilities and number of rooms, beds, bathrooms, amenities, and so on.
Also, a rental marketplace can provide its users with filters such as the year when the accommodation was built, square feet, lot size, or even allow searching for the preferred accommodation with keywords used.
Trulia Renting Search and Filters
For rental marketplaces, the location matters a lot: the specified location is required for everything, no matter whether it’s a house, a flat, or just a workspace.
That’s why it’s crucial to start with the integration of a map to use in a rental marketplace so the renters can use a specific location of their accommodation.
Such an approach helps people find the best nearby rental options or look for rental options and use the desired location.
Vrbo Renting Platform Map
A rental property page is one of the most important management pages to create when you’ve started any rental marketplace business for revenue.
On this page, it’s important to place information about
- accommodation type
- info about the host/house owner
- number of bedrooms and bathrooms
- calendar and map
- information about the facilities and amenities, etc.
Rentals marketplace users decide whether to book accommodation, so it’s important to ensure they have everything they need to start making a decision.
WeWork Renting Property Page
Any rental marketplace platform website is a mediator between the property management and the users who need rental property.
The idea of such marketplaces implies communication; people may need to ask questions, talk about the property or neighborhood details, or discuss the arrival details.
An efficient messaging system will create a perfect solution for such goals.
Airbnb Renting Platform Messages
Relevant rentals recommendations consist of accommodations that are similar to what the guest has already searched for.
This marketplace feature can be useful for both users and the marketplace platform website; while your users have a better user experience, you’ll be able to both retain users and help businesses.
Trulia Renting Recommendations
Recommendations can be found on the main page or on the marketplace listing page as the most popular accommodation, or on the property page below the property description.
Breather Renting Platform Recommendations
What Is a Rental Marketplace?
A rental marketplace is a platform where individuals or companies can rent different types of accommodations from each other.
Among the most notable examples of the marketplaces are Airbnb, Vrbo, Breather, and WeWork.
Airbnb is an American vacation peer-to-peer rental app. The marketplace specializes in properties for vacations and long-term stays.
In addition to real estate accommodation, Airbnb offers its users the opportunity to book experiences.
Experiences are activities that include cooking with locals, adventures, going on tours hosted by locals, etc. The guests need to book those activities in addition to their accommodation.
Recommended: How to Build a Website Like Airbnb
Vrbo is another peer-to-peer rental marketplace based in the USA.
The company describes itself as a marketplace for families that helps to find
- space to relax
- enjoy time together
Breather is a marketplace that allows users to rent out workspaces. The durations are flexible: it is possible to book workplaces for hours, days, or months.
The service is available worldwide and includes offices, meeting rooms, and spaces with high-end amenities.
WeWork is a space-as-a-service marketplace that is dedicated to office space rentals. At WeWork, users can rent out offices, whether they need the space for the long term, short term, or use flexible date bookings.
It’s also possible to rent out both full office space or just a place for one person to work. The option is available for both individuals and corporate users.
Rental marketplaces have a high business and market demand nowadays. And though it may look like a long road at the beginning, it is still worth starting it.
Moreover, it is easier to start building a rental marketplace when you set your goals and know what steps to take. At Sloboda Studio, we recommend the following:
- Choose the solution type between custom platform development or ready-made software. The custom solution can be built in 4 months, starting at $40K.
- Conduct the discovery phase to learn more about the main competitors, target audience, and support marketplace goals.
- Determine the technology stack for more platform flexibility, scalability, and faster development.
- Create a list of features to provide a rental marketplace MVP platform with all the necessary website functionality.
Still have any questions? Here at Sloboda Studio, we have been helping others to develop and support their marketplace business for over 10 years. Contact us for a free consultation.
Frequently Asked Questions
What is a rental marketplace and why is it popular?
The rental market is a platform that allows you to rent a house for various purposes. Various types of users can rent housing on these platforms: individuals or legal entities.
The main reasons for the rental marketplace popularity:
– people still prefer to rent housing
– people begin to travel after the Covid-19 pandemic actively
– companies return to cozy rental offices
What are the core features of a rental platform?
When you start building a business in the rental market, it is crucial to include only the necessary functions. This approach will lead to success because the competition in the market is high, so your rental platform should enter the market first.
We highlight the following main features of the rental platform:
- Guest and host pages
- Search and filters
- Property page
How much does it cost to build a rental platform?
The cost of development directly depends on the features which are included. So, Building the MVP for a rental platform with all the above-mentioned features can cost about $40,000.
What are the legal and regulatory requirements for running a rental marketplace?
Following various legal and regulatory obligations to run a marketplace is important. These include registering your business, obtaining the required licenses, and making sure you comply with laws related to data privacy, consumer protection, and anti-discrimination. Additionally, you should effectively handle tax responsibilities, have rental agreements in place, obtain suitable insurance coverage, and establish procedures for resolving any disputes that may arise.
What are the different types of rental properties that can be listed on my marketplace?
Your rental platform can offer various property options, including commercial spaces, vacation rentals, and short-term rentals. You can also include spaces like shared accommodations, event venues, luxury rentals, or co-working spaces to cater to a diverse range of customer preferences and requirements.
How do I measure the success of my rental marketplace?
The performance of a marketplace is measured by different aspects, including how engaged users are, how satisfied customers are, the financial results, and the position in the market. It’s important to keep an eye on metrics like conversion rates, user retention, and SEO performance, and evaluate the quality of your inventory and how efficiently you operate to understand your business success. Adapting to changing market dynamics is crucial to keep your marketplace successful.