In just five years, Brenton Hayden took his idea to help new real estate investors land renters and turned it into Minnesota’s largest residential property-management companies. Age 21 when he started Renters Warehouse, Hayden’s company now manages more than 3,600 properties across the country, and he expects continued strong growth as he franchises the business nationwide.
Hayden was a laid-off sales rep for Kellogg’s in Minnesota when he decided to get into real estate. Working as a broker’s agent, he devised a plan to target novice real estate investors, assisting them with finding qualified renters for their properties. There were few businesses offering this service, and Hayden thought he could add a new twist by dumping traditional classified ads for Internet spots.
“The marketplace was catering to real estate investors, and I wanted to cater to everyday property owners—the ones who couldn’t sell or who inherited Grandma’s house,” Hayden says. “I’ll help [property owners] lease it.”
By placing ads online, handling background checks, and completing showings, Hayden quickly found renters. Just as quickly, he built a network of satisfied customers who began referring others to Hayden. He asked for one month’s rent as payment when he landed a tenant. Soon Hayden was leasing 25 to 30 homes each month, bringing in $50,000 a month.
It was time to formally launch Golden Valley–based Renters Warehouse in 2007. Hayden spent $79 on his Renters Warehouse website, where he listed rental properties. Less than a year into his business, clients started asking Hayden if he also would manage their properties. He figured, “Why not?” The company’s management services include collecting rent and maintaining properties.
Hayden has grown Renters Warehouse through innovative offerings for property owners, including a nine-month tenant warranty. If a tenant placed by Renters Warehouse doesn’t work out or moves, the company will find a new renter for free. And in contrast with competitors, clients don’t pay a retainer fee to Renters Warehouse (they pay on a renter-by-renter basis), and they don’t have to sign exclusive agreements.
Before long, Hayden was adding agents to keep up with demand, and the company today has grown to 32 agents. Along with 63 other employees they have helped Renters Warehouse complete $1.5 billion in real estate transactions. The company landed at 787 on Inc. magazine’s list of the 5,000 fastest-growing businesses in the country. Renters Warehouse is on track to bring in $7 million in 2012. In 2011, the company’s revenues were $4 million; in 2010, $1.9 million.
Hayden attributes the company’s rapid growth to its distinctive selling points for property owner clients, such as $100,000 in property damage protection and a guaranteed rent program for the first six months of a lease. He also publicized Renters Warehouse by advertising heavily on the radio in areas across the country where the company has franchises. Renters Warehouse market research determined that 70 percent of its customers were white, male conservative Republicans between 34 and 55 years old. To reach that demographic, Hayden lined up Glenn Beck as one of his first spokespeople in 2009. Another spokesman is real estate agent and TV personality Josh Altman from Bravo’s Million Dollar Listing, who appeals to a younger, hipper audience.
After Renters Warehouse aligned with Beck, the company made $1 million off of his endorsement. Continually getting out the company’s name is critically important because it constantly needs to attract fresh renters and new clients. And once clients opt for Renters Warehouse they generally stick around, to the tune of a 98 percent retention rate, Hayden says.
Reggie Brown, CEO of AllPropertyManagement .com, a property management lead-generation business based in Seattle, says Hayden tapped into demand from property owners who needed help renting their homes after the real estate market crashed. “He saw this opportunity and he executed on it with a number of great ideas that aren’t being used in the market,” Brown says. “He has a great sense for ideas and opportunities, and more importantly, he developed a way to put them in place more successfully than any of his competitors. He’s taken a lot of market share.”
The engine for future growth comes from franchising, which Renters Warehouse started in full force this year. The company currently has locations in Arizona, Colorado, Maryland, and Georgia.
Location: Golden Valley
2012 projected revenue: $7 million