After 20 years working in the property and mortgage markets I think most people would become despondent with how inefficient and highly intermediated these industries are.
In order to source, acquire and generate income from a property, an investor would typically interact with 20+ individual service providers and spend literally months of their time, money and effort. In a business world where people endlessly refer to customer experience it was clear that our customers, whether an investor or resident, always came a distant second to the ‘system’.
With all this inefficiency maybe this was why the standard of rental accommodation in places like the UK was so low. Why would an investor want to spend yet more time, money and effort making a property beautiful having battled for so long – and having spent so much – just to buy the thing in the first place. And maybe it’s also why a part-time / amateur property investor would also struggle to find the time to manage these properties proactively.
Property has always been a popular asset class but it’s certainly not a passive pursuit and should never be treated as such. Ultimately, this is housing: people’s lives play out in their homes; so there’s a big responsibility for the industry to respect this and deliver quality, particularly given the increasing costs associated with renting.
There’s never been such a thing as ‘Amazon for real estate’. Buying property is a high value, long-term commitment and there’s always been the perception that people would baulk at the idea of dropping significant sums online to acquire an asset that they may have never seen in the flesh.
But it wasn’t long ago that they said that no one would buy a shirt … or a fridge … or a car online, but now it’s the norm. Investors have been pumping huge sums into the stock market since the early dot.com days, so it’s clear that a streamlined e-com approach coupled with transparency, education and service is an opportunity for the real estate industry too.
People have busy lives and are prioritising time and convenience now more than ever, ever more comfortable with online shopping thanks to trusted e-com brands that have built credibility by delivering on their promises and putting the customer first.
But businesses like Amazon are able to provide this level of service because they control end-to-end transaction and manage the customer across the entire journey, even when they’re delivering third party products. This approach has not yet been applied to real estate. Whilst there are a lot of great tech-enabled companies developing cool solutions in the property world, they’re typically only tackling one or two specific pain points in the transaction. This is great, but in isolation (and surrounded by inefficiency: think mortgage lenders and lawyers) they have minimal impact on the overall customer experience because their piece is just one of a much larger puzzle.
Enter Dot. Our goal is to bring the best puzzle pieces together on one platform, managing the critical path for our customers and guiding a property along its lifecycle. By curating the best partner product and services, and creating our own solutions where good options don’t exist, Dot have condensed a cumbersome and frustrating experience into something frictionless and elegant.
To achieve this Dot have developed a point-of-sale, instant mortgage and created a new ownership mechanism ‘the Dot Container’. We’ve hired an in-house interior design & build team, an FF&E buyer and developed partnerships with brands like Eve Sleep, furniture company Hem, luxury skincare brand Malin & Goetz and haircare giant ghd;quite a segue from what started out as a mortgage lender.
So why move deeper into the vertical? It’s because we believe we have an opportunity to not only streamline investment into housing, but to also mandate better rental housing at the same time. The cost-savings and efficiencies we leverage from our system are thereby be reinvested back into the homes, ensuring that both sides of the marketplace – investor and resident – both benefit.
As a young business we meet with people who suggest we’ve bitten off too much to chew. But the only way that we can deliver on our mission to deliver homes that our residents love is to control the entire vertical. Do it any other way and you end up with a compromised end product, which in reality means more average rental properties hitting the market.
This focus on the resident is so important, they’re the end customer and it’s their income that pays the rent, which in turn covers the mortgage, the management costs and ultimately our investors’ regular return.
Clearly we wouldn’t exist without investors who commit their hard-earned savings and entrust us to help them build and manage their portfolios, but it’s important that we attract investors who are aligned with our ethos. Those that understand the many benefits with investing in properties that our residents love: loyalty, lower voids, lower maintenance costs and (potentially) higher capital gains. This in turn instils pride about where their money is invested…their investment but also someone’s home.