Online Apartment Rental Services in the US - Industry Market Research Report

For Lease: Increased Internet Usage Has Fueled Substantial Industry Growth

Online Apartment Rental Services

The Online Apartment Rental Services industry is characterized by a high level of market share concentration, with the three largest players, Zillow Group Inc., RentPath LLC. and Dominion Enterprises, dominating the industry. Over the five years to 2019, these operators have held an increasing share of industry revenue. By acquiring brands and launching websites designed to serve specific demographics, major players have captured the majority of industry revenue.

Major players dominate the industry

The largest industry operators own the most popular and well-known online apartment rental brands. As a result, the largest operators capture the majority of expanding demand. Zillow Group Inc., the industry's largest player, has some of the most popular brands in its catalog, including Zillow, Trulia and StreetEasy. RentPath LLC., the second-largest industry operator, similarly owns several popular brands, Apartment Guide, Rent.com and Live Lovely.

Slowing expansion helps boost profit

Over the five years to 2019, the largest industry operator, Zillow Group Inc., has grown rapidly by acquiring other apartment rental and real estate websites. However, despite this rapid growth, the company's profit margins have been consistently low, with the company reporting a loss between 2014 and 2017; this is largely due to the company's aggressive expansion strategy. In 2019, these acquisitions are expected to begin to pay off, as the company's industry-relevant operating income is expected to turn positive.

Easy entry leads to strong competition

The industry has a low level of capital intensity, which means operators experience low levels of capital expenditure. However, the industry is highly competitive, due to the large number of companies and the high level of market share concentration. Therefore, it can be difficult for a new company to establish a large list of apartments and landlords without extensive marketing and sales expenditure. However, once a website has a large list of apartments, growing its business will not require significant investment.

This industry provides internet listing and search functions for residential rental properties. In addition to connecting potential renters with apartment owners and managers, these websites often provide targeted advertising services.

This report covers the scope, size, disposition and growth of the industry including the key sensitivities and success factors. Also included are five year industry forecasts, growth rates and an analysis of the industry key players and their market shares.