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23.04.2021Cyprian Łakomy

Supporting private landlords in Denmark - Interview with Mark Jensen from Sapu.dk

Started as a grassroots project, Sapu.dk is a tenancy management system for private landlords in Denmark. Its founder, Mark Jensen, talks about the website's beginnings, transformation into a successful SaaS, becoming an online lawyer without a legal background, and the impact of the covid-19 crisis on the housing market.

Can you tell me about the events that paved the way for the creation of Sapu?

Initially, Sapu was a hobby project. I was an employee of a cable TV network and I was a landlord too. Pretty early on, around 2005 or 2006, I realized that private landlords in Denmark are on their own, in a way.

My rough estimate is that we have between 90,000 and 100,000 landlords here. There was no website or union they could get in touch with for some advice. Everyone renting out a flat had to resort to their attorneys. In practice, a thousand different landlords meant a thousand different attorneys. Hiring a lawyer to ask them the most basic questions about how to rent out a property, or how to conduct yourself with an ongoing tenancy, may end up pretty expensive.

The Danish law revolving around renting out property is quite complex. For the most part, it had been written after the Second World War. It’s a piece of legislation that has not been adjusted to the society we have today, but sort of mended along the way. It only adds layers of complexity.

It’s often not clear what you can and cannot do as a landlord in Denmark, because it is not written directly in the law. You have to acquaint yourself with different court rulings to handle different situations.

I saw a need in the market for someone to provide this kind of information reliably, and in line with the recent legislation updates, clarifying the current legal regime.

The audience for a website like Sapu seemed huge. How did you validate your idea?

I had a website a friend of mine helped me build. It was free of charge. To be honest, I didn’t know what I was doing anyway back then (laughs).

To my surprise, we reached between 600 to 700 members quite quickly. It was an easy thing for a free website, but it did speak something about its potential. A couple of years later, along with the first revision of the website, I introduced annual payments. At first, I was afraid that the payment would kill the project off, but it started to generate revenue from day one!

I was quite surprised that people were willing to pay for it. It also brought me to a position where I became more knowledgeable about regulations etc. I had to stop treating it as a hobby but as a full-time job. Although my background is not legal, I had to become a sort of an online lawyer. Once you start charging people, you have to make sure that anything you tell them is correct.

In parallel with that, the Sapu.dk website was an ongoing project. Around 2013, we started accepting credit cards, which was a huge step forward instead of just providing a bank account number and waiting for the membership money transfers to arrive. Then, around 2018, I got in touch with Prograils.

To what degree were you familiar with the technical side of things before hiring a software development company and choosing Ruby on Rails as a technology for Sapu.dk?

I had no idea whatsoever. (laughs) That is my absolute weakness and if you asked me today what have they built using technical terms, I would not be able to give you a single answer. I was never that bothered with the technical side of things. It’s good as long as it works, is sustainable, and lets me deliver the value I possess to my clients. Technology is not a goal in itself. The website and the knowledge it offers is.

I got in touch with Prograils in a moment when the website’s rework seemed obvious. A friend of mine told me about the work that they had done for his business. In parallel, I contacted some Danish software companies to get a hold of what to expect. I knew the entire operation would be rather expensive, but that’s a relative term, and I wanted to compare several offers.

Can you remember the first serious upgrade after hiring Prograils as a software development team?

It was linking the client database to the apartments and tenants. If a certain landlord has an issue with a tenant and requires our help, we create a case for it. Cases enable us to upload files and keep correspondence in one place. Everything is easy to find for me and my clients. That was the major leap forward.

Then, there was the blog-related upgrade, enabling me to hide parts of the so-called premium content behind the payment wall. Right now, I can decide which parts are available for all visitors, and which can be accessed by the premium users only. It gave me greater control over the parts I wanted to feed Google with for indexing purposes without necessarily giving away all the content.

How many members does the SAPU community have in 2021?

I think around 600 members right now.

The website stores documents and hundreds of data. How do you prevent breaches from happening?

I think with the ISO 27001 information security certificate in software development, Prograils guarantee a decent amount of protection. Of course, you can always do more. The thing I am considering now is whether we should implement the NemID (a Danish common secure login on the Internet that can be used for internet banking, requesting information from public authorities, or engaging with online businesses) one day.

Regardless, the security around the website is not something I am deeply concerned about. We didn’t have any episodes whatsoever. Also, compared to many lawyers who communicate with their clients mainly by email, the Sapu internal chat system ensures a safer and more direct way of reaching landlords and tenants, sending them documents, etc.

The covid pandemic has hit practically every branch of the economy. How has it affected the Danish private rental market and how does Sapu adapt to this situation?

It is really hard to adapt to. In Denmark, we have had a complete lockdown since March.

The first few months of covid and the uncertainty it brought made people greatly consider what kind of costs they would have to take on. Some have kept wondering if things would grind to a halt or even collapse completely. There were great concerns that the housing market would collapse in terms of sales, as the prices of property before the pandemic were already quite high and maybe even a bit overstretched. But it turned out quite the opposite for whatever reasons.

Actually, a housing crash would be a godsend to us. People who can’t sell a house or flat would possibly be forced to rent them out to earn money. This, in turn, would mean a truckload of landlords in Denmark as it did after the financial crisis in 2008, and I believe a big part of Sapu was built upon that situation. If it had happened again, we would have to man up to a great influx of landlords in a short period, and probably enjoy a 200-300% increase in revenue.

We are nearly halfway through 2021. Are there any new functionalities, additions, or extensions in store for Sapu.dk?

We have recently launched a new website called Husleje.dk, which translates to "Rent.dk". We had set sail for it before covid was an issue, in January 2020. The website collects information about rental ads. We are tracking three out of five websites with sales and rental ads in Denmark. Whenever a new offer is published our bots track the most important information, i.e. the rent, location, etc. With Husleje.dk we want to provide a statistical overview of tenancies’ availability based on zip-codes and rent per square meter.

A tool like this doesn’t exist in Denmark. You can buy some data from the huge rental ad providers, but they are quite expensive and not necessarily real-time. With the Husleje.dk data set growing bigger, I hope to offer a correct and accurate view of property rental in Denmark: how many tenancies are there, how long have they been available, etc.

Husleje.dk is currently free of charge. I wanted people to use it first and learn about their interactions with the website. Right now, there are around 800 users. Hopefully, after the next part of upgrades is made and the payment wall enters, at least a part of them will become paying clients.

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