Real Estate: Frustrated rental landlords take action with Web service

Prue Kaley and Michael Levy are landlords and neighbors in Fort Collins.

So, when a recent backyard conversation turned to the sorry state of the rental market in Northern Colorado, Kaley and Levy agreed to do something.

The product of their labors is NorthernColoradoRentals.com, an online inventory and search service for home rentals

“I call it a multiple listing service for rentals,” Kaley said.

The partners are banking on a growing orientation toward the Internet for housing hunters, especially among a younger audience that makes up a healthy chunk of renters. Kaley, who is a residential broker for The Group Inc., has seen that trend unfold first-hand.

“The Group recently had an outside marketing firm do a study, which found that 40 percent were going to a newspaper to find a home and 37 percent were going to the Internet,” she said.

The Internet is particularly in demand for out-of-town buyers and renters, who want to see the lay of the land before they arrive, Kaley said.

NorthernColoradoRentals.com isn’t alone in offering rental listings online, Levy conceded. But the competition is largely national in scope and the selection of Northern Colorado is limited, he said.

Kaley and Levy said their most daunting task is to gain name recognition. They plan to hit mailboxes soon with 13,000 direct-mail postcards to draw attention to their Web site.

In the meantime, Kaley is making personal contact with landlords and property-management firms to drum up business.

The dot-com entrepreneurs figure the three daily newspapers in the region provide the keenest competition, considering the traditional position of classified advertising in the rental market.

But Kaley and Levy think they can compete on depth of information. Each listing allows the landlords to post a picture of the property, terms of the rental agreement, additional amenities and contact information.

Also, landlords can set up their listings and — over the Internet — keep a listing in archives until the property is vacant.

NorthernColoradoRentals.com is also promoting price. The new service charges $9.95 per week and $24.95 per month for a listing, which the partners contend is far cheaper than the cost of a classified ad.

Logically, the slow rental market — vacancy rates range from 15 percent to 20 percent across the region – should be a barrier. But Levy, who helped develop the site, disagrees.

“I think it’s a benefit to us,” he said.

Landlords are looking for a means to gain more visibility for their properties. If the Internet helps them reach more potential renters, they’ll seize the opportunity, he believes.

The Northern Colorado rental market seems to offer potential for the new venture. Kaley and Levy have counted 38,000 rental properties across the region owned by about 13,000 landlords.

The company’s business plan projects a breakeven point within six months.

But any early profits will be used to gain greater recognition for the Web site, said Levy, owner of Levy Consulting LLC, a software industry-consulting firm.

“We’ll fold a lot of money back into marketing and advertising,” he said.

Greeley sales show momentum

Home sales in Northern Colorado showed some pep in September, when real estate agents sold 799 homes, a slim drop of 2.9 percent from September 2002.

Albeit a decline, the September totals stand up well compared with the rest of the year. After the first nine months, sales across the region total 7,868 homes, down 5.4 percent from the same point last year.

The Greeley/Evans market showed the most strength in September, with 361 sales, a gain of 4.03 percent over last September. Sales in the Fort Collins area totaled 277, down 1.07 percent; Loveland sales plunged 17.86 percent, to 161.

All three regional cities remain behind 2002 after three quarters. Greeley/Evans Realtors have sold 3,245 homes, off 2.17 percent from a year ago. Loveland sales total 1,518, down 5.54 percent; the Fort Collins market lags 8.54 percent behind last year, with 3,105 sales.

Average prices continue to hold steady in the face of weaker sales.

Loveland-area homes brought an average of $224,969 in September, up 2.63 percent over last year. Fort Collins experienced a 3.39 percent price decline, with an average sale of $227,679. Greeley/Evans homes sold for an average of $192,893, up1.88 percent.

For the year, all three markets are showing increased sales prices. The biggest gain has occurred in Greeley/Evans, averaging $193,267, up 6.12 percent from last year. Fort Collins prices are up 3.86 percent and Loveland is up 2.77 percent.

Bob Baun can be reached at (970) 221-5400, (970) 356-1683 or via e-mail at bbaun@ncbr.com. His fax number is (970) 221-5432.

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