Residential buildings. (Photo provided to China Daily)
A new generation of online home rental companies is rushing into the market with the aim to overturn traditional rules by directly connecting renters and tenants without brokerage fee.
Kuaiyoujia, 107 room, and huoju365, all established in the past three years, have their own websites, apps and public accounts on WeChat, China's most popular mobile social networking platform. Unlike purely online information sharing platforms, these partially open and agent-free information service platforms check and verify the authenticity of the house and the identity of the house seekers before accepting them.
A 28-year-old IT engineer, surnamed Li, sought a new house in Beijing at the beginning of this March, the peak of house renting in big cities as working population returns from hometowns after the Spring Festival.
There are about eight million floating population in Beijing, with the estimated number of house seekers reaching 10 million.
About 100,000 renting trades happen every month, said Niu Huanqiang, a marketing director from Homelink Real Estate Agency Co, China's largest pre-owned home broker.
House seekers use every information available, ranging from friends' introduction, open and free online information sharing platforms such as 58.com and ganji.com, to online and offline property agencies who charge brokerage fee.
Vowing to improve the service that their predecessors lack, the new market players know what renters and tenants care most.
Li heard of 107 room from a friend and became a registered user after the platform verified his work email address.
"107 room is trustworthy and convenience as it introduces the property owner directly to the tenants", Li said.
He does not have to pay a large amount of brokerage fee to property agents but gets no guarantee when things go wrong.
Five years ago, he rented a house from an agent with one monthly rent in brokerage fee and found it leaky after moving into it. He wanted to move out but the agents charged him another two monthly rent in deposit with the excuse that he terminated the contract unilaterally.
Homeowners have their own worries about agencies. They do not want agencies divide too many rooms in one house and stuff 10 people in it, or rent the property to those who cannot afford it.
Renters also feel unjustified for agencies requiring a house vacancy period of about 45 days, during which the owner gains no yield no matter the house is rented out or not.
The stories of some agents deceiving both renters and tenants have been extensively reported in media, which reveals the weakness in regulating the real estate agents.
According to the list of top 10 property agencies receiving most complaints, which is issued monthly by Beijing Municipal Commission of Housing and Urban-Rural Development, the majority of complaints come from house renting sector concerning mostly illegal partition, refusal to give back deposit, and contract termination.
Some agencies' deceptive measures develop from offline to online. The problem of property agencies' posting false information online is still rampant, said Zuo Hui, chairman of Homelink in an interview in 2012.
According to a report from China National Radio in January, about 80 percent of information is false in the house renting market.
The potential demand for a safe, transparent and fair house renting platform is strong and some entrepreneurs see the trend.
"Through monopolizing information, property agencies earn high brokerage fee and push up renting prices", said Wei Wei, CEO of 107 room. "It is unimaginable in today's Internet era."
Wei himself was defrauded by a top property agency in 2011 and took the case to the court. The lawsuit lasting for one year made him determine to change the house renting industry.
"We will form a competitive relationship with traditional agencies like Homelink," said Wei. "It is a battle between Internet and traditional agencies."
But the way is hard and steep, so do startups like his company.
Homelink alone takes more than half of Beijing's property market. Enough number of available houses impede the development of these online newcomers.
"There are a few houses," said engineer Li. "For those who are eager to find a place to settle down, it is hard to find a suitable one on 107 room."
