Home Rental In A Box
Story published by the San Fernando Valley Business Journal Sept 18 2017
By Helen Floersh
Internet: She automated management of her vacation house and plans to share the system.
What began as a pair of luxury homes in Mammoth and Malibu has evolved into Nomadness Rentals, an online vacation rental company in Woodland Hills that boasts more than 100 properties in Mammoth, Oceanside, Malibu and Baltimore.
And after nearly a decade of growth, Chief Executive Millie Freed is preparing to offer the industry the proprietary software that has fueled her company’s growth.
“We bootstrapped this company, and we haven’t had anything but complete success,” Freed said. “A lot of that is because of this software, and now it’s time to break it out and give it its own identity.”
The product, called NomadRez, gives individual homeowners and small- to mid-sized vacation rental companies a suite of tools for managing properties. From organizing bookings to tracking payments to contacting housekeepers and handymen, the platform streamlines operations. Rather than charge a subscription fee, NomadRez takes between 2 and 3 percent of earnings from each reservation booked through the platform.
“The software that’s out there is really cost-prohibitive for the little guy,” Freed said.
The platform was designed with the “digital age” in mind, giving property managers the ability to post listings on multiple online vacation rental marketplaces, including Expedia Inc. subsidiaries Vacation Rental By Owner, or VRBO; Home Away; and FlipKey, as well as popular short-term rental platform Airbnb Inc.
NomadRez has strong appeal for homeowners who are looking to scale their vacation rental businesses.
“It’s a beautiful thing to have a system like this,” said Joe Liebke, chief executive of international luxury vacation service Villaway Inc. in Beverly Hills. While his 10,000-property company is too large for NomadRez, having something similar in his company’s early days would have allowed him to circumvent growing pains.
“I used to run my business out of a little notebook, and it was challenging,” he said. “Having something like NomadRez can help you get off the ground the right way.”
Global revenues from private homes and room rentals through digital marketplaces grew an average of 3.6 percent annually between 2011 and 2016, according to market research firm IBISWorld. The growth seems to be driven primarily by millennials, who prefer the relative affordability and convenience associated with renting a vacation home through a digital platform.
Homeowners eager to capitalize on the industry’s growth have more distribution channels available to them than ever before, but running multiple vacation properties can be challenging. Freed learned this the hard way in the mid-2000s, when she and her husband hired a property management company to oversee their Mammoth vacation home. Besides securing only a handful of bookings the first year, they were also left with busted lamps and a broken bed.
“I said, ‘I can do this better myself,’” Freed recalled.
To solve the problem, she vetted and established contracts with nearby home service companies. She also hired a developer to build a website, and taught herself search engine optimization. Within six months, the site had organically found its way to the top of Google, Bing and Yahoo’s search indexes. That year, occupancy at the Mammoth property jumped to 93 percent. Freed decided to shut down the hypnotherapy clinic she ran to focus on her rental properties full-time.
At first, Freed was listing homes on VRBO and Airbnb as well as her company’s own website. Before long, she no longer needed the others to bring in business and property owners began coming to her to request that she list and manage their homes, too.
“Homeowners were saying, ‘We can advertise through Airbnb and HomeAway (but) we need somebody to manage the property,’” Freed said.
She reestablished her vacation rental business as a virtual property management company, dubbing it Nomadness Rentals. The firm has seen sales growth between 40 and 70 percent every year since.
As the number of properties managed by Nomadness increased, so did the company’s need for efficiency. Freed began looking for software to automate operations.
When her search turned up plenty of options – all of them too costly – she once again took matters into her own hands. She recruited a developer to build a proprietary software platform that allowed customers to book reservations while also letting her and other homeowners manage the properties on the backend. After five years of finessing, Freed had a product that could simplify the process of renting out and managing one’s vacation home.
The software differs from others in its category in two key ways, Freed explained. First, payments by renters are immediately distributed directly to property owners rather than being held in a trust. Second, NomadRez gives homeowners the ability to promote their properties through multiple channels, affording global exposure through a single platform.
“Airbnb got ordinary people into the vacation rental business,” Leibke said. “This kind of software allows a business to scale in a way that is a lot more manageable than it used to be.”
NomadRez will be available to new customers on Oct. 1, but some longtime Nomadness Rentals property management companies are already using it.
The first edition handles rental businesses with up to 300 homes; an upgrade with the capacity for up to 1,000 listings is in the works.
Like any startup, Freed expects that one of her company’s biggest challenges will be inspiring confidence in NomadRez. Fortunately, she can link the software to at least one success story: her own.