Institutional landlords have some big advantages in the single-family rental market. Their economies of scale have helped drive innovations in all kinds of products and services.
OwnAmerica, an online exchange for rental homes, wants to make some of these technologies available to smaller landlords, starting with insurance that is tailored to their portfolios.
The company, which was founded in 2010 and is privately held, has received an equity investment from Affinity Worldwide, the parent company of National Real Estate Insurance Group (NRIEG). As part of the agreement, NREIG will become the preferred insurance provider on OwnAmerica’s platform.
Financial terms were not disclosed.
Currently, the platform has a banner ad that links to NREIG’s website. Soon, however, it will be possible for landlords who list their portfolios on the website to apply for an insurance policy from NREIG directly from the platform; the insurer will be able to use portfolio on the platform to produce a quote.
“Right now, it’s a hand off,” said OwnAmerica CEO Gregory Rand. The first iteration of the product integration will be ready shortly, however, and this integration and will become “deeper and deeper each quarter.”
Rand said that many investors with small portfolios of rental homes rely on traditional homeowners insurance for coverage. NREIG’s products are more tailored for landlords with multiple properties, he said. For example, the premiums are updated monthly, providing landlords with a break for any properties that sit vacant.
Once NREIG’s products are fully integrated into OwnAmerica’s platform, a landlord won’t have to notify the insurer of a vacancy, because that information will be conveyed as soon as the landlord’s portfolio is updated online.
The deal with Affinity also includes a partnership between OwnAmerica and another of Affinity’s operating companies, Think Realty, an education and information resource for real estate investors.
Specialized insurance policies are just one kind of product that has been tailored for rental homes since large players such as Progress Residential, Tricon American Homes, Invitation Homes and American Homes 4 Rent started accumulating huge portfolios after the financial crisis. These Wall Street landlords, in turn, brought attention to smaller players, which still own the vast majority of rental homes in the U.S.
Rand said that OwnAmerica is in negotiations with other firms about offering additional kinds of products over the platform, include property management, renovation and financing. In some cases, however, OwnAmerica might not have a single preferred provider. Some property management companies may specialize in a certain part of the country, while some providers of financing might specialize in a particular product.