Finding affordable rent in some cities is like finding a needle in a haystack. The Triangle is not immune to this problem. To combat this, Duke graduates Mitchel Gorecki, Colin Tai and Patrick Wickham founded Alcove, a platform that allows you to search for inexpensive, private rooms to rent in furnished homes or apartments.
Allowing users to rent a space for shorter periods than a full year with price ranges from just over $300 up to $1200 per month, Durham-based Alcove—once known as LivingLab—was the solution the co-founders needed when searching for affordable housing themselves.
Says Gorecki, “We hear this story all the time of, boy, I got so badly burned because my roommate just stopped paying rent and now we both have an eviction on our record because I couldn’t afford it. Those relationships shouldn’t be contracted that way.”
Alcove, founded in 2018, attracted the attention of VC investors from Silicon Valley and New York City, who invested a total of $2.7M in pre-seed and seed funding. But the lack of affordable housing is no longer just a problem that applies to the very largest cities, but also in areas like the Triangle, while projects to build affordable housing take political will and many years to complete even in best-case scenarios. To help bridge that gap, Alcove is offering users the flexible housing arrangements they want.
“I personally think we’re going to completely revolutionize the way people share housing and live together,” Gorecki said, adding that one in three American adults shares housing with a roommate, making it the No. 1 housing arrangement for a millennial. “The amount of pressure in a market that in my opinion super-sucks, right, people get in really poorly contracted relationships all the time, and it represents a third to half of your income. So I truly think we are creating a product that will offer people a really great way to affordably live.”
One of the selling points of Alcove is its speed of transaction, currently creating a turnaround of around 48 hours to move someone into a property with furnishings and utilities—and the team is working to make this happen faster still. Alcove takes a percentage of each rental transaction, with the specific percentage varying depending on the level of services provided to the parties in the deal. For instance Alcove can help a homeowner or renter quickly turn that spare bedroom into a fully furnished, ready-to-rent space.
Started On Duke Campus
Alcove’s first iteration targeted the Duke community and focused primarily on matching roommates in off-campus apartments for undergrad and grad students.
“We started off at the very beginning just as an app,” said Tai. “It was a Tinder-swiping-phase kind of app where you could swipe right or left on bedrooms and roommates. Back then our thesis was that people care most about roommates, but they actually don’t care as much about the properties, and so that’s why we made the product so relationship-centric. That actually works really well within the Duke community.”
Hundreds signed up in the first few days. But the Alcove team discovered that details of the property were much more integral in the renting process than they originally thought, and Alcove adapted accordingly.
“We sort of realized that that was also an important distinction,” Tai said, “but at the end of the day I think there are a lot of property management companies out there that have great supply. And for us, I think the way we’re growing is balancing that importance of having great supply on our platform but also putting a great importance and really valuing the relationship and the roommates aspects of our matching process.”
Currently Alcove receives double-digits of new applications daily for would-be renters in the Triangle—where the company is focusing for now before hoping to expand to other markets—and less than 5 percent of their users are students.
Even as it moves away from campus life, though, Alcove purposefully works to create good co-living relationships between roommates in its goal to become the leading provider of by-the-bedroom leases. One underrated key: electronic locks on individual rooms.
“The whole process is very nuanced with a lot of risks that people don’t think about,” Gorecki said. “One of the ones is we enforce electronic locks. So your phone is your key, and some people don’t love that. And our response is, well, that’s how we can verify that your roommate doesn’t copy and distribute keys and suddenly it’s, oh my gosh, people love it.”