Renters Warehouse aids homeowners looking for an income stream
When is the real-estate business not about selling a home? When the focus is on renting.
That is the philosophy of Tom Didier and Andrew Noegel, co-owners of Renters Warehouse Milwaukee.
Although both are also agents with Re/Max United in Port Washington, the rental venture is independent of the real-estate business and has taken on a life of its own.
“It all started about six years ago when the real-estate market tanked. We started Premo Property Management as a way to help homeowners who were having trouble selling their houses,” Didier said.
“After the real-estate bubble burst, it wasn’t uncommon for homeowners looking to sell their houses to have to come up with $25,000 to make up for lost equity. When they would say they didn’t want to do that, we suggested they try renting their houses and have someone else pay their mortgage”
If the name Premo sounds familiar, Didier said it was borrowed from an old Port Washington-based brewery.
Didier and Noegel said the rental business was really just a sideline that at one point seemed as if it was becoming more trouble than it was worth. Managing 10 to 20 rental properties accounted for about 5% of their workload.
“We got to the point where we either needed to close it down or grow bigger,” Didier said.
They chose the latter route, and just over a year ago they bought the first Renters Warehouse franchise in Wisconsin.
That franchise ownership included access to proprietary software and training, as well as exposure through national marketing.
The chain is based in Minneapolis, where the company manages more than 5,500 rental properties — mostly single-family homes.
“It is hard to say what our ceiling is, but it doesn’t seem unreasonable to think we could grow to the size of the Minneapolis business because we are similar markets,” Didier said.
“The beautiful thing about Renters Warehouse is that it is scalable — so it can be as big or as small as we want,” Noegel said.
The partners bought the rights to operate a Renters Warehouse franchise in the Milwaukee market, which currently stretches from Sheboygan to Racine and Kenosha. They also have the right of first refusal for any new markets in Wisconsin.
Didier and Noegel currently have contracts with more than 150 homeowners each month.
In addition to the owners, there are five full-time employees who serve as leasing agents and process the rentals. The firm works with area contractors to handle any maintenance issues.
The business operates out of second-floor offices in the Re/Max United building on Grand Avenue.
“We are growing, and I am guessing that by this time next year we will be relocating to office space in Milwaukee,” Didier said.
“We manage some properties in Ozaukee County, but homeowners in Milwaukee seem a little more open to the idea of renting their houses than we are here.”
Didier said the company charges a flat $80 a month to manage a rental property, regardless of the rent.
“If you are renting your $150,000 home, paying an $80 a month charge is a no-brainer,” he said.
“The ideal is to keep the homeowner out of the equation — we take care of maintaining the building and collecting the rent. They don’t even need to know who their tenants are. All the owner has to do is check their bank account and watch the rent come in.”
Didier said homeowners have the final say on what needs to be done on their property.
“We aren’t going to spend $1,000 on a new water heater without the owner’s approval,” he said.
If the company is asked to find tenants, there is an additional charge equal to the first month’s rent.
“We post the properties online and can have tenants in place in as little as 48 hours,” Noegel said.
Part of that management process involves making a video record as new tenants move into the rental property to verify the condition and document any future damage claim.
Two unannounced visits are made each year to reassure the homeowner that the tenants are not abusing the property.
The success of Renters Warehouse in the metro market reflects a change in attitude about homeownership.
“We have found that Millennials aren’t as drawn to the idea of owning a home. They like the idea of being able to move as they want and not being tied down to a mortgage,” Didier said.
Capitalizing on that idea, the parent company just obtained the trademark rights to the term “rent estate,” rather than real estate.
TOM DIDIER (LEFT) and Andrew Noegel posed with Renters Warehouse signs outside their Port Washington office in the Re/Max United building.
Photo by Mark Jaeger