Zillow Rentals: Multifamily Monetization Model

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Is that $650 for the entire building or for a single unit?

For the entire building. It's actually a pretty good deal. When I first started, it was $50 for the entire building. I remember when we doubled it to $100, everyone was shocked. But when you break it down, it's essentially free money. So, $650 is the current rate. I would guess they're probably at $800 by now. Apartments.com is essentially getting twice as much money out of every building. You pay $650 for the building, whether you have one vacancy or 30 vacancies. In the upper right-hand corner, there are sponsored ads you can buy, called boost, which allows you to get additional impressions. Zillow is quite good at targeting the right people who are most likely to rent at your building.

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For that $650 on average, how many rentals a year do they typically advertise for a building? What would be the cost per lease, in some way?

Now, to the next point, we did some studies where if you integrate a PMS system like Yardi, it connects well. Sophisticated companies like Greystar are good at tracking where leads originated. They use UTM codes to see where someone first looked at a property, so Zillow can get attribution credit. With the Greystar study, we found about one and a half leases per month at an average Greystar property. If you're paying $650, the cost per lease is about $425. If you're renting that building out for $3,000 a month times 12 months, you're making $36,000 and paying $450 for that lease, which gives you an 8x ROI.

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You have these two leading sites, Apartments.com and Zillow Rentals. Are there any other sites we should look at, or is this like a duopoly where they are sharing the market?

Comscore is a great resource for unbiased third-party marketing data. It's excellent for tracking eyeballs, which is what we focus on when meeting with partners. We both use it. Zillow claims to be the best because they have the most site visits, while Apartments.com claims superiority due to having the most listings, which is true. They have about twice as many listings. I think Zillow has around 45,000 multifamily paid advertisers now, while Apartments.com is closer to 100,000, probably in the 90s.

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