By Alex Hemmer
BU News Service
BOSTON — When Divya Varadarajan began searching for apartments to rent in Boston this past summer, she did not have high hopes for her outcome. Having already spent one year in Boston as a research fellow, she was prepared to compete in the search process, compromise on roommate preferences, and live in an old, run-down unit.
With these expectations in mind, Varadarajan, 33, was in disbelief when she stumbled upon a rental listing on an apartment search website that appeared to offer her everything she wanted: a flexible month-to-month lease and the possibility of being matched with roommates she would get along with.
“I was extremely cautious because it’s so easy to get scammed,” she said. The listing was posted by a rental management company called SplitSpot, a company she had never heard of but that had now piqued her interest.
SplitSpot was founded by Ernesto Gaxha, 28, and David Mazza, 27, both second-year MBA candidates at MIT’s Sloan School of Management. Having experienced numerous challenges living in cities like Boston and New York, where rent is notoriously expensive, the entrepreneurial duo was inspired to come up with a way to simplify the rental experience.
On one side, SpitSpot minimizes the risk for landlords by guaranteeing rental income and paying the full market price of their property. In the position of the tenant, SplitSpot can advertise the property for sublease, allowing them to set the terms of the contract in a way that would generate interest from those looking for housing.
In addition to offering flexible leases and matching tenants with potential roommates, SplitSpot only requires one month’s worth of rent as an upfront cost.
“A core competency is that we focus on roommate situations,” Gaxha elaborates. “We typically get people who are new to the city or whose friends already have apartments so they need a place to stay – people who have to gather a group of roommates but don’t have the resources to do that. That’s why they come to us.”
What started out as a student business pitch at the annual MIT $100K challenge last fall has since grown to serve nearly 100 tenants in the Boston area.
“There’s a similar structure [in Manhattan], with broker’s fees, high costs, and inflexible leases. It’s very difficult to find a place to live, especially coming right out of college and starting a new job,” Mazza explained, recalling his first few years as a college graduate in New York. “I had to find a broker. He toured me through a few places, and for that hour, the cost was a full month’s rent.”
Gaxha offered a similar perspective, sharing that he once had a landlord in Boston who raised his monthly rent by 11%. In response, the then recent college graduate felt inspired to react innovatively.
“I was like, ‘wow, at this rate, we could just afford a mortgage.’ I said it jokingly but then I was like, ‘well actually, we could just afford a mortgage,’” he said.
Together with his roommates at the time, Gaxha took out a mortgage to purchase a triple-decker house. To help reduce their shared cost of living, the roommates lived in one of three units while renting out the remaining two.
This experience is what Gaxha refers to as the “initial seed” that would lead to co-founding SplitSpot.
After meeting as graduate students at MIT, Gaxha and Mazza quickly connected over the idea of starting a rental management startup that would serve the Boston area.
Although their initial MIT $100K pitch did not result in an investment, they were determined to press on. Eventually, the pair made their way to MIT fuse in January 2019, joining an accelerator program aimed at turning business ideas into real companies over the course of three weeks.
“We spent the whole month of January really focused on the business and we really fleshed out what we were doing. January was when we got our first landlord,” Mazza said.
Being in a long-distance marriage, Varadarajan needed a temporary living situation. She was drawn to the possibility of exiting a lease early to live with her husband, who will be joining her in Boston later this year.
“They also said they would help me find roommates I would be happy with,” Varadarajan added, sharing that her previous rental, which she had found on Craiglist, had left her disappointed.
Determined to put her uncertainty at ease, Varadarajan attended multiple showings by SplitSpot this summer and was pleasantly surprised by the accuracy of the listings she had seen online. By the end of the summer, she had signed a month-to-month lease to live in Cambridge, which took effect earlier this month.
“We’ve grown a good amount over the past nine months,” Mazza said. “There are still a lot of things we’re working out, as any startup is. But we’re excited about what we’re building here, and I think it could be helpful for both sides of the market.”
Editor’s note: The writer of this article used SplitSpot’s services to find an apartment.
Correction: A previous version of this story misspelled David Mazza’s last name.