A national player in the property management industry has its sights set on Richmond’s residential rental market.
Renters Warehouse, a Minnesota-based company that manages thousands of properties in 14 states, launched its first local franchise this spring and opened an office Thursday in Glen Allen.
The office, at 11207 Nuckols Road, shares a building with Exit First Realty, which is collaborating on the venture with a local franchise of HomeVestors of America, the company behind WeBuyUglyHouses.com.
Founded in 2007, Renters Warehouse helps homeowners and investors lease and manage rental properties. Services include property pricing and showings, tenant placement and background checks, inspections, lease documents, rent collections, and management of issues such as evictions and property damage.
Wes Donovan, who started his HomeVestors franchise in 2004 with fellow Exit First associate Robert Kirwan, is leading the new Renters Warehouse office as principal broker and managing partner. He co-owns the venture with Kirwan, who now runs HomeVestors, and Marc Austin Highfill, head of Exit First. There are also two other employees working for Renters Warehouse full-time.
Donovan said the three Renters Warehouse franchise co-owners launched the business this spring, taking over management duties for about 80 of Exit First’s rental properties.
“With Marc’s business, he had a lot of pent-up demand for property management that he just couldn’t service,” Donovan said. “Now that we have a standalone business and we’re set up to handle that, we’ve brought all that in.
“We are solely focused on property management. We don’t do anything else in this office.”
Donovan said the partnership produces leads for all three companies. After three months in operation, he said the Renters Warehouse franchise has grown to about 120 properties, and Donovan said he is aiming to reach 200 by the end of the year.
“The sky’s the limit,” he said. “This business is set up so that we need to be managing thousands of properties. And that’s where we aim to be.”
Renters Warehouse charges property owners a flat monthly management fee – between $80 and $110 for properties of all sizes – rather than a percentage of the rent.
Donovan said that fee model drives volume, which in turn allows the company to keep its rates for services low. The company also charges franchises a royalty fee and takes a percentage of their revenue. Fees are also charged for the various technology packages provided to each franchise.
In addition to those fees, Donovan said startup costs have totaled about $35,000. Add to that the office lease, employee training and advertising, and Donovan said he expects the total startup cost to reach about $75,000.
Donovan said his office would likely be the only Renters Warehouse franchise in Richmond, by design. He said the company aims to have one franchise for every million or so people in a metropolitan area.
“They want to see those offices do high volume,” he said. “That’s the idea: one office, heavy marketing and advertising, but also volume.”
Donovan said demand for rental properties is growing from both renters and investors, as more baby boomers and millennials forego homeownership in favor of maintenance- and mortgage-free living situations.
“We’re seeing there are a lot of generation groups that just aren’t as concerned with being homeowners anymore. They’re content being renters,” Donovan said. “There’s this huge demographic shift right now moving from homeownership to being a renter, and that’s driving the demand on the rental side.”
Great ad on WRVA Radio!