Renting a home in a new country is complicated enough, and in Germany even locals find the housing system tricky.
Luca Steinmetz founded FARAWAYHOME to ease that burden for international renters, with an online platform for curated, furnished rental properties in Germany and the UK.
Luca shared with us how staying bootstrapped shaped the business, why he’s keeping humans in charge of its AI tools and what it takes to earn a renter’s trust.
You started FARAWAYHOME in 2012 while managing your father’s vacation rental. What was the specific gap you saw that wasn’t being addressed for professionals and families relocating abroad?
When the vacation rental market started booming, I noticed a gap in servicing homes in the mid-to-long-term rental market space.
It was easy to find short-term vacation homes, but there weren’t any good options for international folks or expats that wanted a real home abroad. The German housing system is complicated enough for locals and I wanted to alleviate that pressure for international people looking for homes here.
FARAWAYHOME has grown without any outside capital, from a single Berlin apartment to a vetted portfolio across nine cities. What have been the biggest trade-offs of staying bootstrapped, and what do you see as the advantages?
The single hardest thing about being bootstrapped is that 100% of the responsibility is on me.
When I started FARAWAYHOME, I had no money and no funding to hire a team of designers and developers. I even tried to learn how to code by myself and failed. It was a humbling experience. Today, I have a small team of developers and with AI, I can also work alongside my developers and write thousands of lines of codes each week.
The upside of being bootstrapped is that it makes you more determined to succeed. I set priorities and goals to become profitable and never worried about the negative ‘what if’ scenarios. It just wasn’t an option in my head.
Even during the hardest moments when Covid hit and I faced bankruptcy, I had to face the challenge head-on and focus on finding a solution. I believe this was only possible because I was bootstrapped and had the hunger and drive to make it.
You charge tenants no fees at all, making your money on the provider side. How does that structure affect trust and the quality of providers you attract?
It’s actually the other way around, by not charging tenant fees, we get more tenants who trust us. They know we’re not there to rip them off and it’s our job to make sure we send qualified tenants to providers.
With our two-step verification process, both parties know that they’ve been properly vetted and validated by us – so in the end you get qualified tenants with quality homes.
The platform serves four segments: diplomatic missions, corporate secondments, relocating families and private long-stay tenants. What do these groups have in common, and where do their needs actually diverge?
They all want a place to call home. They’re looking to rent the entire apartment and not live in a sublet or share space with other roommates.
Security is a high priority for diplomats and celebrities. Diplomats and relocating families often stay for years, whereas corporate clients vary and can stay from months to years.
You recently launched FARAWAYHOME OS, moving from a marketplace into workflow software for providers, relocation experts and HR teams. What was the insight that pushed you to build an operating system rather than just a better listings platform?
Renting an apartment is usually a very long and complex process, especially in Germany, where the real estate market is still not fully digital.
The current process is long and cumbersome for both providers and for the tenants. Prior to FARAWAYHOME OS, I had to manually find apartments for over 100 interested tenants relying on emails, G-Drive folders and spending time just attaching and sending documents back and forth. It was a time-suck and clients asked me if I could just build a solution for them.
Now with AI, that’s possible and that’s why I built FARAWAYHOME OS so that providers can spend less time on admin and focus more of their energy on their business. Likewise, with FARAWAYHOME OS, tenants have one place where they can upload all their documents and get verified that same day.
Your new Smart Assistant drafts responses to tenant inquiries and flags issues like date overlaps or occupancy limits, but never sends a message without a provider reviewing it first. Why was that human-in-the-loop design important to you?
Our Smart Assistant does an amazing job and saves hours of time for our providers. But like any new technology, we’re all in the AI learning phase. We’ve purposely placed guardrails as we ultimately want our providers to make the decision that best fits the needs of their properties.
Some of our providers regularly turn to our Smart Assistant and our newly launched Luca AI concierge feature to speed up their process and as our AI tool improves, I hope that we get to a point where providers will select our Smart Assistant and Luca AI as the default option.
You’ve found that AI-assisted search is now the second most popular way renters find a home abroad, ahead of Bing, Yahoo and DuckDuckGo. How’s that shift changing how you think about your listings and your data?
It’s shifted how we optimise. Previously, we focused only on SEO and SEA, but now with AI-assisted searches, we’re investing our time in optimising websites, listings and content for AI-assisted searches.
Interestingly enough, AI-assisted searches have also changed how we think about ‘listings’ and how we search. It used to be a page that interested tenants would scroll through with a simple search term like ‘furnished flats in Berlin,’ and now, with AI searches, a ‘listing’ is like a summary of all the important facts that a tenant would be interested in and specified, such as rent, minimum stay or availability to location, etc.
This new search result also changes how we measure, since AI assistants usually omit referrers so we had to think about how to attribute visits properly.
Scams and deposit fraud are a real fear for people renting abroad. Beyond your two-sided verification process, what specifically are you doing to protect tenants and providers from attackers?
I think our two-step verification process actually turns off a lot of scammers because it’s too much of a hassle for them.
One in five tenant applicants is usually declined because we have such a rigorous and secure process in place. This gives peace of mind for our tenants because once they’re verified, they can be sure that all the properties they’re interested in are vetted by us with a minimum four-star rating.
This goes both ways, as our providers trust us to only send tenants with verified documents, ID and income. It’s so easy to fake documents, and that’s why we do our due diligence to make sure to send only qualified and quality tenants.
What’s the biggest lesson from more than a decade of running FARAWAYHOME that you’d tell yourself if you were starting again today?
Resilience. That’s the one word that stuck with me throughout the years. When you start a business, there’s more stuff you don’t know than stuff that you do know.
But the more experience you gain, the easier it gets. That doesn’t mean I work less, but I now have the tools and knowledge to understand how to take on a new problem and challenge.
