We Asked Property Managers: To Zillow or Not?

Zillow Rental Manager shot into popularity in the US housing industry as a free rental listing site in 2006, as an inevitable alternative to Craigslist. However, in 2021, Zillow’s CEO, Rich Barton, officially announced a new policy of charging a weekly fee of $9.99 for each unit advertised on their site.  

Before we dive into whether the policy succeeded or not, let’s take a look at Zillow’s business model first. Zillow operates on a Freemium model whereby it initially creates a market for its products and focuses on providing real value to its consumer base. Once the target audience gets addicted to the model, they monetize their services, making it to the headlines. They have already transitioned into brokerage while acquiring tech companies such as ShowingTime, and now it’s time for rentals.

As the economy reopens, it appears consumers are falling back into old habits, and the company doesn't project much growth in the second quarter of 2021. According to data provided by S&P Global, Zillow experienced a 23% drop in stock prices in March! And it doesn't take a genius to figure out why.

Market’s reaction to the policy

When Zillow was still free to use, it was the hottest spot to list your rentals, amassing an average of 34 million monthly views across its three listing platforms. Landlords and property managers alike flocked to the listing giant because of its ease of listing units. Convenience was the name of the game, and boy did Zillow capitalize on it.

Zillow was a great place to plant your roots as a budding property manager. Its users could overlook the (frankly) terrible service in return for its cost-effectiveness and its popularity as a listing site. But that was before Zillow rolled out its new policy. Now property managers cannot reconcile the outrageous fees with the poor service provided. We reached out to a small community of property managers, and here’s what we found out from our research on ZIllow.

At least 80% of the property managers were not in favor of continuing their businesses with Zillow, whereas the percentage of managers who were unsure of their marketing strategy was equal to the percentage of people who were content with Zillow and it's services. Shockingly, if the property managers in larger percentage continue to turn down Zillow's cheaper packages every month, there is a definite chance of people transitioning from a definite "Yes" to a "Maybe". Here's what property managers had to say:

“Zillow has been manipulating our leads to create an artificial demand!”

Let's unpack that particular statement, shall we? Although it seemed like almost every rental unit advertised on Zillow had a lot of inquiries coming in, the reality was that the source of these inquiries were poor-quality leads which barely added any value to the lead generation cycle. A large proportion of property managers seemed to be better off without Zillow; some even went as far as to claim that Facebook Marketplace was better and a great Zillow alternative, generating quality leads. Once Zillow started charging for rental listings, property managers had to reconsider available options in the market, look for Zillow alternatives and conduct a cost-benefit analysis. Surprisingly it appeared to most that Zillow was only resulting in junk leads and had lower conversion rates than other free options. Thus, making Zillow an ineffective marketing channel for their rental units.

“Zillow’s inaccurate listing information has been harming our units' visibility!”

Property managers reported that Zillow had inaccurate listing information up for their rental units. The site would not show the units for the categories they were tagged in, or sometimes even show them in different locations or cities altogether! These technical errors lead to multiple potential tenants ignoring the listing completely, resulting in a loss of quality leads for property managers as well as dollars lost in ad expenditure. This left property managers asking themselves what the point in paying for a listing was if the listing doesn't even show up for their potential tenants?

“Zillow's ‘lead guarantee’ can only guarantee poor-quality leads.”

Zillow offers a 'lead guarantee' feature where, if property managers do not receive a lead within a week, the unit is free to list until they do find a lead (for up to 8 weeks). Sounds fair, right? Wrong. The problem with this particular feature was that Zillow has made it very easy for renters to immediately request information directly from the listing. Property managers dedicate a lot of time and resources to responding to these leads, but they often don’t lead to any follow-ups, let alone a showing or an application. But for Zillow, a lead is a lead, regardless of its quality. So, property managers might end up paying for the listing without even receiving a quality lead in return. Moreover, the hassle of deactivating a listing to avoid additional charges leads to unwanted renewal fees as well.

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Why is #ZillowWho trending?

It is no lie that Zillow is still the category king with the highest share of visits per month. However, the new Zillow Rental Manager costs for each listing have led property managers to look for Zillow alternatives for advertising their units. And rightfully so. With all these negatives stacking against each other, is it any wonder property managers have decided to turn away from Zillow?

Small property owners managing lesser units refuse to pay for Zillow as they intend on utilizing the free Zillow alternatives available The consensus is to attract more tenants by listing vacant units on at least 20 to 30 different sites. In case property owners openly request listings on Zillow, they have to pay the listing fee on top of the property management fee.  

For most small and medium-sized property managers the decision to move away from Zillow, which initially felt like a daunting task, actually turned out to be profitable. They didn’t face any negative consequences such as a drop in quality leads, or higher days on market.  

However, it is also important to acknowledge the role of current market dynamics that come into play for an upsurge in traffic. In a hot market, it is usually easier to attract tenants with free listing sites, but a change in the market’s direction can leave many struggling. The efficiency of each listing website varies for each state; therefore, it is important to research the market you are operating in before making a decision.

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So what can property managers do?

The best advice we can give property managers is to thoroughly research and be better informed about where your best leads and approved applications are coming from. Most property managers just assume Zillow is necessary. It’s not. With a multipronged approach, you may never need Zillow again.

1) Edit all listing descriptions advertised to refer people back to your website to request a showing via pre-screening form. Phone calls, drop-ins, general email inquiries – edit everything.

2) Get started on virtual tours and amp up your Facebook presence.

3) Utilize all the major marketing channels and ads, while ensuring they push visitors back to your website so that they recognize you as property managers with properties, not the property itself as a stand-alone. Work smart and this will guarantee exposure for your business.

4) Last but not the least look out for your competitors. It's not Zillow that's your competitor, it's the other companies that are leveraging tech-savvy options to their advantage. While you definitely want your bottom line to take the least hit with additional costs, when it comes to strategizing your marketing budget, emphasize on your relationship with your owners and their needs.

List of Zillow Alternatives

Sometimes, property managers have to deal with a few owners who insist on using Zillow. For them here is a list of a few free Zillow listing site's alternatives:

1. Facebook Marketplace: FB Marketplace rentals can be the one-stop Zillow alternative solution for all property managers that are looking to market their properties to a larger more relevant online audience. Facebook Marketplace allows landlords and property managers to list apartments and homes without any charges or commission.  
   

2. Rental Beast: This site has a comprehensive listing database with over six million rentals nationwide, and it integrates with Facebook Marketplace to post home rentals listings. In many key rental markets in the US Rental Beast has access to over 70 percent of the total rental inventory which makes it one of the best Zillow alternatives, and it offers tenants local area experts and licensed real estate agents to help guide them.

3. Realtor.com: Realtor.com is one of the best Zillow alternatives and it is of the original real estate listing sites which offers one of the largest inventories of properties and homes for sale. It has an easy user-friendly interface which is perfect for those who aren’t too tech-savvy, and with their great customer service help is just a click away.  

4. Zumper: Zumper has been the second best to Zillow for a long time both in terms of quality leads and attracting traffic. Zumper has always been a go-to Zillow alternative option for most. The best thing about it was its partnership with Facebook Marketplace in 2018. The rental feeds uploaded on Zumper would directly get integrated onto Facebook Marketplace, which was new and a huge disrupter in the industry.
   

5. Apartments.com: This is one of the most comprehensive search engines available for rentals. There’s a large range of filters, from your usual price range and apartment type, along with special features like types of apartments. The websites default view is a map and even though you can’t search by neighborhood, there is a thorough keyword search along with a tool, which allows you to map out exact search borders. As a Zillow alternative it is a comprehensive website with an extensive database.

6. Avail: This is a great Zillow alternative especially because it syndicates to other listing platforms! It makes it easy for landlords to share their listing to social media using a custom marketing and portfolio site that includes a tenant portal. Avail allows landlords to communicate with tenants from all of the syndicated sites from the Avail platform.

7. Homesnap: It is an online real estate platform that includes great features like an intuitive map-based search function and has an immense amount of property information. Much like Zillow and Trulia, its real estate browse function is easy to use. What makes it a great Zillow alternative and sets it apart from the competition is its mobile app. A mobile app is always convenient and with this app, tenants can take a real-time picture of a house that is for sale with their phone and have the app query all the necessary listing information about the property.

8. Cozy: The listing features on this platform are incredibly easy for landlords to use with one of the most user-friendly interfaces when compared to other competitors and might make it a valuable alternative to Zillow for many. Landlords can list, market, lease, and manage their property all from Cozy’s amazing dashboard design. As an alternative to Zillow listings is also syndicated to Realtor.com.  
   

9. Craigslist: This is the original and first rental website, even though it may seem like Zillow has replaced Craigslist, it is still a must for nearly every tenant on the hunt for an apartment. There are scams to wade through, but Craigslist still offers the best deal because small landlords and owners can post listings directly for free. It may not be the perfect Zillow alternative but it is still important.

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Avail is a great option, especially considering their new relationship with Realtor.com. You can also think about using social media to find tenants - Facebook Marketplace is an excellent Zillow alternative - or list your property in local newspapers, green sheets, and classifieds. In a non-COVID-19 world, sponsoring a community event or team can also be a good way to get your properties out there. The point is that there are many ZIllow alternatives it's just about figuring out which one works the best for you and it is always great to market your properties on several platforms instead of just one!

What’s the future for Zillow?

Zillow became the top rental listing site because it did not charge for listings and provided a great user experience with trusted data. But Zillow may be risking its position in the market by putting up a paywall and requiring fees to list rentals. Since they also own Trulia and HotPads, where the same paywall exists to advertise, their overall rental listing inventory could decrease across all three platforms. Few property managers, if any, would want to advertise on a platform when there is a paywall.

In the short term, it is unlikely that Zillow’s change in policy will not strongly affect the market. The listing site currently has the majority share of the market (27.2% as of 2017 data), so tenants will continue to search Zillow’s platform for their next home. We are already noticing a decrease in listings active in MLS than in Zillow by 20% in few regions. Hence, it is likely that in the long term, Zillow’s inventory will most definitely decrease, and property managers will start to shift to other free Zillow alternatives which offer the same or even better services as Zillow.

Ultimately, we recommend that rental property managers considering whether to list a rental on Zillow should carefully think about their priorities and look for the products and services that are best suited for them.

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