Robot Landlords Are Buying Up Houses
Companies with deep resources are outsourcing management to apps and algorithms, putting home ownership further out of reach.
by
Nick Keppler
This house—840 square feet, a century old, imperfect but livable—could make for a good “starter home” for someone with a few grand for a down payment and the ability to make monthly mortgage payments, which would almost certainly be less than the average rent in this neighborhood. Instead, it was purchased by Imagine Homes Management, which has been gobbling up houses in Pittsburgh, Minneapolis, and a few other post-industrial metro areas where there still are plenty of cheap single-family homes.
As soon as I leave, I get an automated text asking if I want to apply to rent the place at $1,590 a month. Just like the viewing, I could go through every other step—applying, paying a deposit, moving in and even living there a few years—without speaking to human being. No one would give me a key, just a passcode. This has been the experience of some actual Imagine Home tenants.
Nick Osborne, a medical student, rented a three-bedroom house in the Cleveland area with his partner. In the two years they lived there, they never interacted with anyone at the company in person, he told Motherboard, except one maintenance worker deployed for fixes.
“Moving in was fairly simple,” he said. “All information was left in a folder on the counter and all documents and passcodes provided electronically. There was no direct interaction with anyone.”
Imagine Homes is an example of an “automated landlord,” a company that uses new data tools and technologies to minimize the costs of on-site human labor while collecting profits from rental properties. They are essential to the new and growing sector of companies backed by Wall Street investment firms that buy up thousands of single-family rental homes across several states.
Founded in 2016, Imagine Homes is linked to Colchis Capital Management, a deep-pocketed West Coast investment fund interested in companies that automate and simplify real estate transactions. Unlike most of the larger mass renters of single-family homes, they haven’t opened leasing offices in any of the cities where they operate—Pittsburgh, Cleveland, Cincinnati, Minneapolis and St. Louis, according to
The Automated Landlord, an expansive look at the role of technology in the Wall Street grab of houses, published in the February 2022 issue of the journal
Environment and Planning.
The company, which did not respond to multiple requests for comment for this story, has not specified its number of employees. By most indications, it is a scrappy outfit, with
35 employees listed on LinkedIn and
50 to 200 estimated by Indeed, all to manage 1,500 houses across four states and to rapidly acquire more. It outsources and automates most of the tasks that traditional landlords do.At a time when escalating
home prices are pushing more people
out of the prospect of ownership, landlord automation doesn’t just help wealthy investment firms own an increasing percentage of the U.S.’s small homes—it makes the whole paradigm possible.
