The Happipad Vision
Rent with trust
Imagine the perfect rental transaction. Alice lets everyone know that her place is for rent. Bob knocks on Alice’s door, steps in, and asks to rent the place. Alice agrees and hands Bob a set of keys on the spot. There is complete trust between Alice and Bob and as a result, the rental transaction proceeds swiftly without any concerns.
The ideal rental transaction might sound impossible, but it’s not.
For example, you would probably rent a suite to your sister without hesitation if you know from a lifetime of experience that she is responsible and of good character. Pre-knowledge about her has removed the need for due diligence. There are additional, more subtle reasons to believe that this agreement is secure. Your sister is a member of your family and has “reputation collateral”. If she were to behave poorly as a tenant, she would threaten her good standing in the family and risk exile. A similar situation can occur if you were to rent to a neighbour in a very small community or if you were an employer renting to employees. In all these cases, a rental transaction occurring between members of a small community gains an unspoken social collateral that increases security for both sides.
There are considerable challenges in scaling up the efficient rental model seen in smaller communities to larger ones. Once the number of members in a community exceeds several hundred, it becomes impossible for the members to know each other well enough to simply trust each other. Moreover, diminishing connection between members of larger communities reduces the impact of reputation collateral. For example, it really isn’t a big deal if you upset your current landlord, because you know you can simply move on to the next landlord. There are slim odds of the two knowing each other.
It’s not impossible to scale up the efficient rental model, but the problem is that the necessary tools to do so are not in place. Remember, efficient renting requires adequate up-front information and social collateral. Rental listing services, like kijiji, offer neither of these. They connect anonymized users with the minimum possible information, meaning that significant time must be invested to perform due diligence. As a renter, you can view thousands of ads for prospective rentals, but some may be expired, some may have pending agreements, some may be posted by a scam artist, and most are probably legitimate. It’s up to you to sift through the ads. As a landlord, you may get lots of responses to an ad, but it’s up to you to meet and check the background of each applicant. The efficient rental model breaks down.
Happipad’s vision is to scale the efficient rental model up to an arbitrarily large number of people, by created an online community of trusted renters and landlords. Membership in this community first requires that you authenticate your identity – through personal ID and social media – so that you prove that you are you and in turn, you know you are dealing with real people. In order to create a community in which membership is desired, the service provided by Happipad must be sufficiently valuable so that users will want to maintain membership. To this end, Happipad offers one of the first all-in-one rental platforms in the world, where users can not only search and advertise like traditional listing services, but also get screening reports, schedule viewings, answer questions, and sign contracts. The all-in-one platform serves another important purpose – it provides a natural framework to integrate landlord and tenant review. Users accumulate reputation based on past reviews, so that the system has the collective memory to naturally promote good behaviour. Because continued use of the Happipad service depends on a good reputation, rental transactions are further secured with that all-important social collateral.
In summary, Happipad has created the necessary conditions to scale up the efficient rental model: a community of real, authenticated users, a suite of rental tools that connect members efficiently throughout the rental process, and a peer review system to promote good conduct. With Happipad, we can now rent with trust.
This post was written by Happipad