Small Residential is Twice the Size of the Hotel Industry
The small residential sector includes all single-family rental homes and multifamily properties with 50 units or less, where the majority of US residents reside, or a staggering 87% of all long-term rental units.
OAKLAND, CA—Earlier this month, Mynd Property Management, a property management firm serving the small residential sector, merged with RentVest, a property management company operating in various national metros. With its new partner, Mynd more than doubles its size to more than 8,000 units.
While that doesn’t sound like a big number in institutional terms, combined, the new entity forms one of the US’ largest small residential property management firms. This comes on the heels of its acquisition of Sacramento-based Raymond Management last month. With this transaction, Mynd expands in Northern California with approximately 1,100 Sacramento-area rental units and 125 North Bay rental units.
Nationwide, Mynd has expanded its footprint to 16 markets including existing markets of the Bay Area, San Diego, Sacramento and Seattle. The bulk of the 4,000-plus RentVest portfolio is located in Phoenix, Reno and Las Vegas. Additional markets include Dallas, Atlanta, Portland, Vancouver, Tucson, Denver, San Antonio, Houston and Tampa.
“This merger is a huge step forward in our goal to become the first company to scale property management for the small residential industry,” says Colin Wiel, chairman, chief technology officer and co-founder of Mynd. “By leveraging technology, we hope to transform the industry and scale to over 100,000 units under management within a few years.”
Pursuant to the merger, RentVest co-founders and principals Jacob Ash and Benton Cotter join Mynd’s leadership team. Ash and Cotter have experience in both the property management and real estate investment sectors.
“We were very impressed with Mynd once we started learning more about what they were doing, and how they were doing it,” explains Ash. “The company’s business operation is built for scale, which will further enhance our offering to property owners.”
Under the leadership of Vincent Deorio, Mynd’s director of mergers and acquisitions, the company continues to target property management partners whose core values align with its own. Mynd’s vision is to offer investors access to national investments and property management opportunities, along with the use of technology to aid in the management process. The partnership between Mynd and RentVest moves the company closer to that goal by providing investors access to strong rental markets such as Phoenix, Las Vegas and Dallas.
The small residential sector includes all single-family rental homes and multifamily properties with 50 units or less, where the majority of US residents reside. According to the US Census, the United States has 15 million single-family rental units, 21 million units in buildings of two to 49 units in size, and only 5.1 million units in buildings 50 units and larger. This means a staggering 87% of all long-term rental units in the US are small residential, dwarfing the 13% share for large residential. In the United States, small residential is a $467 billion per year industry, more than twice the size of the hotel industry, GlobeSt.com learns.
Buildings with more than 50 units are typically serviced by full-time on-site employees that are owned by large institutional investors and surrounded by an ecosystem of professionally managed service providers including brokers, lenders, insurers and property managers. On the other hand, properties with one to 49 units are serviced by people driving around to the buildings, owned by individual investors and surrounded by ecosystems of much smaller service providers.
“Small residential properties are far more complex to take care of, due to the fact that they are scattered over an area instead of being concentrated together, and technology and big data are essential for managing the complexity,” Wiel says.
He says that’s where Mynd comes in, with an app that is providing a real-time service to managers of those smaller properties.
“We are doing what others aren’t. We are providing real-time transparency via app on a phone,” Wiel tells GlobeSt.com. “When operating single-family rentals at scale, we realized the bigger we get, the better we got.”
Wiel said the Mynd app’s functions indicate money collected, repairs needed and leasing activity/showings, with projections coming soon.
“Our vision is to grow into the 50 largest US markets using this systematic process of optimizing rents so units will rent quickly at the maximum rate,” he tells GlobeSt.com.