Do you remember how people used to meet realtors to choose a house to buy? 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 44% of employees started working remotely in 2020. This means today people spend more time at home than ever before and thus 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.
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 a space to relax, reconnect, and 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, the 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 Marketplace Business Model
Before you start developing your marketplace, make sure you know how you are going to need to monetize your marketplace and think about its business model payments.
In general, the 3 most popular monetization models are fees, advertising, and premium features.
The marketplaces charge payment fees for transactions.
For example, Airbnb charges both guests 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 models. Nevertheless, no one likes too many ads. So consider ads your future monetization model, and start using it only when you’ve got a loyal audience.
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 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.
Step-By-Step Guide to Building a Rental Platform
Before starting the product development process, we recommend choosing a solution type, then conducting a discovery phase, and finally selecting the most suitable technology stack you may need for future product development.
Choosing a Marketplace Solution Type: Custom or Ready-Made
- Free and ready-made solutions to build a marketplace
The ready-made marketplace solutions are perfect for the quick development of smaller 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, scalability, or handling high loads.
- Custom development to build a marketplace
Custom development is suitable for marketplace projects that have specific business logic and customizable marketplace features.
In general, custom marketplace development may need more time and money, and payments than any ready-made solution when you build a marketplace. However, as a result, it will be a fully functional marketplace where all the features and architecture are implemented according to your business needs.
Conducting a Discovery Phase
Once you’ve decided on the marketplace solution type of the future peer-to-peer rental marketplace, you can move on to conducting a discovery phase.
The discovery phase is a deep analysis of the product idea, reviewing the product requirements, and evaluating the possible challenges and solutions.
After its analysis, you’ll be able to start getting a better understanding of the:
- Product’s niche
- Core goals
- Customer pain points
- Technology stack
- Platform architecture
- Suitable scope
- Possible challenges or limitations
- Product features
- User journey
Selecting the Most Suitable Technology Stack
When you are just starting to develop a rental marketplace, it’s better for your business to focus on MVP development first.
At first sight, it seems possible to start developing an MVP with almost any technology you like. However, taking a closer look, there are actually some requirements that should be taken into account when choosing the right tech stack for a marketplace.
To start, you’ll need the technologies that are:
When you build a marketplace MVP, make sure it includes only the core features.
However, you’ll definitely need to create more additional features after launching and further down the road.
- Ready for high loads
Rental marketplaces are all about large databases and lots of users.
When you build such a platform, it’s better to choose technologies that are stable and ready to handle a lot of users and a large amount of data that you’ll need for your business.
7 Essential Rental Marketplace Features
When you start to build a rental marketplace business, it’s important to include only the necessary features. 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 marketplace features any rental marketplace should have.
As usual, the sign-up and login processes should be performed by asking the marketplace users for their email, name, phone number (optional), and password.
Lots of modern rental platforms 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 rent marketplace has at least two user roles, it is essential to diversify them by different abilities.
For example, the renters may have the ability to look for an accommodation and book the desired one, while 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 users to specify the type of accommodation or the desired location.
However, the search itself is never enough, especially when we build marketplace rent platforms.
Here, the more detailed the search results are, the better for the business. So we suggest including filters to use the advanced search.
For example, allow marketplace users to choose a property type, pricing, certain dates of availability, facilities, 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 use.
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 to find the best nearby options or look for rental options and use the desired location.
Vrbo Renting Platform Map
A property page is one of the most important pages to create when you’ve started any rental marketplace business.
On this page, it’s important to place information about the accommodation type, description, photos, info about the host/house owner, number of bedrooms and bathrooms, calendar, map, information about the facilities and amenities, etc.
The marketplace users decide whether to book an accommodation, so it’s important to make sure 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 owners and the users who need to rent a 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 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
How Much Does It Cost to Build a Rental Platform?
The cost of a rental marketplace platform depends on various factors: the number of features, their complexity, the tech stack, and even the developers’ experience level.
However, let’s talk about the cost of two main stages of any rental marketplace implementation: MVP website development and product scaling.
At Sloboda Studio, we always recommend starting marketplace product development with MVP, or minimum viable product creation. This includes only the core product functionality and doesn’t take a lot of time and money to implement.
Usually, a basic rental marketplace MVP website will cost between $30,000-35,000.
Scaling is only possible when your product business is launched with all the necessary marketplace functionality and has its first users, feedback, and 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.
Moovle is an Airbnb-like accommodation rental startup located in Belgium.
When we met our client business, the Moovle renting marketplace was in its idea stage, so our team had to develop an MVP in order to bring the idea to life.
Moreover, the Sloboda Studio team had to implement the required functionality in less than two months so that our client could represent the product to investors.
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
Property Management System
Our Client is a real estate business that owns multiple residential and vacation properties and rents out houses and apartments.
The goal was to automate the entire process of managing multiple properties, start centralizing data storage and use a channel for seamless communication with tenants.
The Sloboda Studio team was able to automate repetitive tasks, such as manual property postings and billing.
We were able to create efficient data storage and communication channels. In addition, we helped our client to start managing multiple properties in one place.
Moreover, such an upgrade helped our client receive more positive feedback and a higher customer conversion rate.
Also, we started and implemented such platform functionality as:
- Online leases
- Accounting and reporting
- Maintenance request tracking
- Channel manager
- Multi calendar
- Properties posting
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 to start 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:
- Choose the solution type between custom platform development or ready-made software.
- 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.
We assist our clients with the discovery phase, MVP development, support product upgrades, and business scaling. Contact us for a free consultation.