With his last two companies, entrepreneur Langley Steinert tried to bring some reality to the often overhyped and opaque worlds of booking a hotel and buying a used car. Both those companies are now publicly traded: TripAdvisor and CarGurus.
Steinert’s latest project involves helping renters understand whether that airy 2 BR, 1 BA apartment in the South End is really as good of a deal as it looks.
This week, Steinert and cofounder Tom Gilmore are taking the wraps off a site they’ve been working on since late 2020. In an effort to tap into some of the TripAdvisor mojo, they’re calling it ApartmentAdvisor. The startup has 13 employees and an office in Harvard Square, not far from where Steinert hatched his prior company, CarGurus.
Most of today’s apartment search sites, Gilmore explains, “show you the most expensive inventory on the first page. We’re trying to do the opposite,” and focus on apartments that offer the best value for the money, using a rating system that ApartmentAdvisor has developed. “We want to show listings that people really want, rather than something that’s aspirational, but may be out of their price range,” Gilmore said.
Most apartments listed on the site carry a label indicating whether they are a “Great Deal,” “Fair Deal,” “High Price,” or “Overpriced.” That $4,400-a-month one-bedroom in Seaport? It carries the “High Price” label, despite the indoor basketball court and concierge.
Gilmore says there are “close to 100 different things we are looking at” to create that rating, including crime data from the neighborhood and building amenities such as elevators, parking, dog (and human) day care, and in-unit laundry. The company is also planning to develop tools that will help renters understand whether they have the income level and credit score to qualify for a particular apartment. “The landlord doesn’t want to get 100 leads [of prospective renters] with credit scores too low,” Gilmore said.
Steinert says that the company is working with five large property databases to obtain listings. The plan is to present those listings for free but to charge landlords and rental agents for a premium position at the top of a page, similar to the CarGurus business model.
The company has raised several million dollars from Steinert and Gilmore’s networks of friends and relatives, rather than venture capital firms. (Amy Mueller, the company’s vice president of marketing and public relations, wouldn’t share a specific number, but said it is lower than $5 million.) Investors include TripAdvisor CEO Stephen Kaufer, former TripAdvisor and CarGurus chief technology officer Nick Shanny, and Pete Nicholas, cofounder of medical device maker Boston Scientific.
Steinert says that his past two companies have gotten to profitability with only about $5 million in funding. “I’m not going to go raise $20 million or $40 million for ApartmentAdvisor,” he says. “I don’t think you need to. Keeping your burn rate low allows you to dodge and weave and change things as you go,” he said, referring to the rate at which a company spends money. “I’ve got enough capital. I’m trying to put it to work. The last thing I want is to have some venture capital firm put money in.”
People in the United States spend about $174 billion each year renting apartments, according to the research firm IBISWorld. But several big entrenched players help fill vacant apartments, including Zillow, Apartments.com, Zumper, Craigslist, and Apartment List.
“The question for ApartmentAdvisor is, how do you differentiate yourself,” said Ishay Grinberg, founder of the Somerville-based startup Rental Beast. It supplies data about apartments to the operators of multiple listing services, databases used by brokers. One challenge for ApartmentAdvisor, he says, will be gathering listings from smaller landlords, who may only own one or two apartments each.