Sydney startup capitalises on the rise of granny flats in a hot property market
If you wanted to make use of the extra space on your property and build a secondary dwelling – like a granny flat – you’d probably have to embark on an extensive Google search and sift through 800,000+ results. This is the situation Sydney-based entrepreneur Jay Wright found himself in last year.
He had recently purchased property, and was contemplating adding a granny flat. But he found the search experience to be “a disperse tangle of hundreds of dodgy builders website, a lack of concise and reliable information or ease of comparison in the industry.”
“There was no one-stop-shop for people looking into granny flats,” he adds.
It was this frustration that spawned the idea for Granny Flat Finder – an all-encompassing marketplace for property investors to browse, compare, and enquire upon granny flat designs. The site also offers value in verifying builders, providing personalised recommendations and matching customers with builders who are in line with the budget and design orientation.
Wright says a lot of thought and planning went into creating a product that offered a disruptive value proposition for stakeholders on both sides of the equation. He adds that for builders, the leads that come through via GrannyFlatFinder.com.au are “not just tire kickers who have been squeezed through lead generation platforms”.
“They are prequalified, matched to the builder and have already expressed an interest in the specific designs available.”
Wright’s preliminary research resulted in thousands of people going through the same second rate buying process every day for granny flats. But the demand wasn’t entirely unprecedented.
Legislative changes had been made in NSW to mitigate the increase in property prices and rental demand. The changes were widely welcomed as it allowed property investors to generate dual income by building granny flats on applicable blocks. More recently, ACT updated their legislation, allowing granny flats to be larger and more appropriate as rentals.
“The target market for granny flats is no longer granny. It’s very much becoming a mainstream property strategy so we are seeing interest from the full spectrum, first home buyers, investors, homeowners seeking passive income, there really is a diverse interest,” says Wright.
After five months of development and planning, in December 2013, Wright and his co-founder Harry Laos finally launched GrannyFlatFinder.com.au. The January report of the site saw 3,000 unique views on Granny Flat Finder, 16,000 views of designs and builder profiles and 217 customers enquiring.
Fast-forward nine months, and the startup claims to have signed up 80 percent of all granny flat builders in Australia, up from about 15 percent in January. In July, unique visitors increased to 12,000 and design views shot right up to over 56,000. Customer enquiries have also grown 15 to 20 percent month on month.
“The speed of growth has been really astonishing. Last month we had around 1,800 granny flat designs viewed per day, which is up around 80 percent from three months earlier. The leads and sales from the site have grown in relative proportion to these page view statistics,” says Wright.
“The speed of the uptake has been a strong validation of the need and value in the product.”
Wright considers his main competitors to be directory listing sites as well as the big real estate portal players like RealEstate.com.au and Domain.com.au.
“The initial feedback we received from customers and builders was that the directory listing sites did a poor job of connecting relevant qualified customers with the most suitable builder, often leaving customer getting harassed by dozens of builders and builders quoting endlessly without result,” says Wright.
The startup has received a number of investment offers of up to $250,000 – especially for the new version of GrannyFlatFinder.com.au that is yet to be launched – but has chosen steer away from accepting external capital. The founders’ equity and resources have meant that the major expenses of a digital startup have been minimised.
Wright says, “[W]e have completed the project for a fraction of this cost.”
The new version of GrannyFlatFinder.com.au, which is launching in the upcoming weeks, will be very tech-centric. At the moment, the site allows customers to connect with builders via email or phone. The new site will trim down and systemise the referral process, so that users aren’t directed away from the main technology.
Wright says it will be similar to RealEstate.com.au where everything can be done on one platform.
The matching algorithm connecting customers with the right builders will also be improved, which Wright says “is really the heart of the innovation of the new site”.
Added to that, customers will have profiles on the site to ensure high quality leads for builders. On their profiles, customers will be able to upload pictures of their backyards to visually demonstrate their needs.
“As it’s a fairly unique product there is heavy customisation around a platform that matches customers with builders in a meritocratic and fair approach, based on previous factors of success and trust,” he adds.
The startup has also noticed over 50 percent of its traffic coming from mobile and tablet devices. As such, Granny Flat Finder is investing heavily in upgrading the site to be mobile and tablet-friendly.
Where many other startups focus heavily on perfecting product and get lost when it comes to marketing, Granny Flat Finder hasn’t shied away from using multiple marketing channels to generate awareness right from the get go.
“We are lucky to be able to call on Director Jay Wright’s digital marketing agency Search Insights for ecommerce strategy and marketing, as well as development,” Laos says.
Thus far, SEO and social strategy has been the most effective for Granny Flat Finder, according to Wright.
“You can’t type anything into Google about granny flat’s without GrannyFlatFinder.com.au showing up somewhere on the first page of results,” he says.
Facebook has also generated positive results for the startup. In less than a year, Granny Flat Finder has surpassed 10,000 fans on Facebook, who make up a very engaged community.
“The new designs of granny flats have really resonated with the channel,some of our posts are getting “viral” reach, being shared 600 times,” says Wright.
That’s not to say that the startup hasn’t faced challenges. Wright says their biggest challenge has been dealing with misconceptions around granny flats – not many people see them as valuable investments.
“The changes to council regulations, new designs and accessible price point have made the granny flat a legitimate property investment vehicle,” says Wright.
“Even though more and more people are waking up to this, there is still a large portion of the public who are unaware of the progress the granny flat has made.”
Overall, it definitely seems like blue skies ahead for this startup. Wright believes the second iteration of the website will lay the foundation and infrastructure to scale the business.
More information is available via www.grannyflatfinder.com.au.
Image (L to R): Harry Laos, Jay Wright, Co-Founders of Granny Flat Finder. Source: Provided.