Rapidly growing Renters Warehouse sees infinite opportunities ahead

When Renters Warehouse won the 2014 Business Builder of the Year award, the company had just eclipsed $5 million in revenue.

A couple years later, when CEO Kevin Ortner spoke on a panel hosted by Club Entrepreneur, it was up to 15 offices and $15 million in revenue.

The growth has never stopped, though a lot has changed over the last nearly 10 years. Now, while leasing and management is still the core of the business, Renters Warehouse is far more technically savvy. That has allowed the company to become more of an end-to-end solution.

That means the company can underwrite any home that’s for sale in its more than 40 markets across the country. It’s also created a marketplace that allows people to buy single-family rental properties with tenants already in place.

Renters Warehouse has passed on buying its own properties in favor of becoming a technology and service company helping others at every stop in the single-family rental property market.

It has created proprietary technology for the management of its homes. It has quit seeking franchises and bought back about half of its franchised locations.

And, during or after the company helps a client buy a home, if it needs some renovation, the company will oversee that, as well.

“We’re trying to simplify this and make it more like buying and investing in other more traditional investments versus the complexity that sometimes comes with trying to find the right investment from a house,” he says. “When you bring all of these pieces together, it really creates a wonderful investor experience.”

Tried and true strategy

Renters Warehouse has stuck with

Renters Warehouse

Description: Single-family rental marketplace and management platform

Headquarters: Minnetonka

Founded: 2007

CEO: Kevin Ortner

Employees: 250

Website: www.renterswarehouse.com single-family homes, Ortner says, because there wasn’t a glut of large marketshare competitors in the niche like there are for investors in multi-family housing.

“Single-family rental property managers historically, up until a decade ago, have been very local, mom-and-pop type businesses,” he says. “There’s a huge opportunity in single-family versus multi-family because there wasn’t a large national single-family rental property management brand until five years ago.”

The market has become more crowded in recent years, but even now, Ortner adds, there are around 16 million single-family homes in the country and Renters Warehouse, as one of the larger players in the sector, is involved with just more than 15,000. So, there remains tremendous opportunity for growth.

“It’s a huge opportunity,” he says. “That’s what we serve and that’s what we’re going to continue to focus on.”

The company also chooses to help manage properties for others rather than buying the properties themselves for long-term reasons, as well. As an asset owner, Ortner says, the company’s value gets locked in at some percentage of net asset value. A service- and technology-based company, he says, likely has a higher upside in terms of stock price and value creation.

“We have considered ‘Hey, should we start a fund and buy the houses ourselves,’” he says. “We’ve just made a strategic decision to keep our business really asset light and be the best service providers we can.”

Renters Warehouse is now in 42 markets, 27 of which are companyowned. It reported $27.9 million in 2021 revenue. The newly public company has yet to release 2022 financials.

Growth brings challenges

While Renters Warehouse has grown significantly, it hasn’t happened overnight or without the occasional sleepless night. Significant growth in a relatively short time actually brings on its own challenges, says Ortner, who started with the company in Phoenix as its first franchisee well before taking on his current role in 2015. He recommends business owners build time into their schedule for looking at

Contact: : Kevin Ortner is CEO of Renters Warehouse: 952.470.8888; kevin@renterswarehouse.com; www.renterswarehouse.com; in/kevinmortner the big picture.

Kevin Ortner, CEO of Renters Warehouse, has overseen significant growth and recently helped take the company public since taking on the role in 2015.

“Such an important thing I wish I had started doing earlier in my career was really building in strategic planning time in my calendar,” he says. “If it’s not built in, it’s not going to get done.”

Falling behind on that gets costly when you are forced to solve problems by hiring more people when it might have been better strategically to instead acquire or build a new technology or implement a new process.

“Strategic planning time for me is really looking at different aspects of the organization and its processes and saying, ‘all right, this is working well at $5 million of sales, but can it work at $25 million? Does this system or process scale to $100 million?’” he says. “If you’re thinking about it strategically, then you can stay ahead of it. It just makes your business run so much more efficiently and profitably.”

Find the right people

While it might be cliche, Ortner says he also believe business owners need to focus on evaluating their staff, figuring out if the right people are in place and hiring the right people to fill holes — while not being concerned about whether or not some of those hires are smarter than they are.

“Some people are worried, whether it’s ego or whatever, that ‘I don’t want people who make me look bad,’” he says. “I say, ‘hey, I’m weak in these areas, I want really strong people here.’ So, I’ve been able to, over the last five or six years, certainly hire really key individuals through the business that I can say ‘great, this is your role, this is your deal.’ And they, in turn, make me look good.”

Bringing in the right people also helps establish a good company culture from the bottom up. In its earlier years, Renters Warehouse won several “Great Places to Work” awards from different publications. Maintaining that has been challenging as the company has grown, Ortner acknowledges, especially with workers spread across 27 locations in 20 states.

He does try to engage with them through team building events, celebrating people’s successes, giving away prizes and just being available. The company holds monthly town hall meetings to stay on top of it.

“It starts with transparent communication to everyone,” Ortner says. “When you’re remote and everyone’s not around, it’s easy to not communicate with people all the time, but doing so brings some camaraderie among the team.”