Startup Aims to Expand iBuyer Model to Rentals
October 14, 2019
Home sellers aren’t the only ones who stand to reap benefits from the iBuyer transaction model: Some companies want to shake up the property management business by touting “iRenting.”
A new startup called Doorstead promises to act as a property manager for single-family home rentals and guarantee properties are rented at a specific rate in a specified time period. The company says it will absorb all the risk, even if it can’t find a tenant for a property. The company also says it will handle algorithmic pricing, advertising, tenant interviews, maintenance and repairs, leases, and online payments. In return, the firm charges a percentage of the rent collected.
Doorstead has drawn $3.3 million in funding so far; the company currently operates in five cities surrounding the San Francisco Bay Area. “We’re in the process of Uber-izing each step of the property management life cycle,” Doorstead CEO Ryan Waliany told TechCrunch. Waliany added that he hopes the company can become the OpenDoor of rentals.
Waliany says he expects other companies to follow suit with their own versions of the iRenting model. Other property management startups, such as Mynd, OneRent, and BelongHome, currently guarantee rent only after tenants have been found.
Some critics question the iRenting model and wonder whether these companies will overleverage themselves. “With any new business model, there will inevitably be ‘unknown unknowns’ that we cannot predict—‘black swan’ events and things that we might only be able to learn through calculated bets,” Waliany told TechCrunch. “There are three large trillion-dollar industries: food, transportation, and housing. At Doorstead, we have an opportunity to completely redefine the housing value chain by creating a new class of property management that eliminates unnecessary vacancies. In the end, this redefinition of the value chain allows ourselves to become the Blackstone of the future. It seems like we’re giving everyone free money.”
Updated: November 18, 2019