While the real estate market consistently fluctuates, the demand for housing doesn’t, and this is especially true among young professionals and families looking to rent single-family homes. Along those same lines, the demand for quality property management support remains steady, as well. Keyrenter, the 100-plus unit property management franchise, provides a values-based, tech-supported solution for property owners and renters alike, designed to generate predictable, recurring revenue.

“Even when the real estate market is down, our business is better,” said Nate Tew, co-founder and CEO. “Because more people are looking to rent out their houses and rent houses [to live in].”

Originally launched in Salt Lake City, Keyrenter is a full-service property management concept that handles everything from tenant screening to ongoing maintenance demands. This provides property owners with a reliable, low-stress rental experience and creates a resilient, low-overhead business model for franchisees. While the business isn’t always glamorous, it meets a consistent need and is steadily improving with the help of new technologies as the brand grows.

“It's not a sexy business. It's one that is getting more tech-forward and tech-focused, especially with repeatable processes that we have. There's a lot that AI is doing to make it easier for us to do our jobs,” Tew said. “But what a great business it's been and what a great way to build wealth and create opportunities for our families through this business.”

By combining this operational efficiency and steady rental demand with a mission-driven, values-focused company culture and leadership team, Keyrenter provides franchisees an ideal vehicle for building long-term success while delivering great service across their local communities.

Tew joined 1851 Franchise Publisher Nick Powills on a recent episode of the “Meet the Franchise” podcast to discuss how Keyrenter transitioned into franchising, how the company’s culture drives success and why the model continues to thrive in markets nationwide. The transcript of the interview, provided below, has been edited for brevity, clarity and style.

Nick Powills: All right, Nate. How did you accidentally fall into franchising? What's your franchise backstory?

Nate Tew: We began as a local property management company in Salt Lake City with national ambitions. Initially, we planned to open corporate offices in neighboring states, but I was inspired by an episode of “Undercover Boss” featuring the CEO of Menchie's. I saw how he interacted with his team and realized franchising would allow us to bring in strategic partners who were truly vested in their local operations, solving our challenge of managing "boots on the ground" from afar.

My partner and I said, "Okay, let's come together next week, and we'll each have prepared a list of pros and cons for why we should franchise and why we shouldn’t." And the next week, we met up, and I said, "Okay, I've got my list."

And he said, "I don't have a list, but I already hired the attorney. I already got the website live. I've already got someone in mind for FranDev," and we were doing it. We didn't really know exactly what that meant and what it would be like, but we started connecting with other franchisors who had been at it for quite some time.

I attended a couple of Discovery Days early on to get a feel of what that might look like and be like, and we learned a lot in the process of getting ready to launch and then launching and having our first Discovery Days and learning from those and signing our first people and having our first training week in January of 2015.

And the amount of knowledge that comes through trying to build the airplane while you're flying it is pretty incredible.

Powills: You sign your first franchisee. Now what?

Tew: Yeah. That's what it's like. You're like, "Okay, we have this," and Aaron, he was taking the lead on franchise development, getting people in the door. We would both tag-team Discovery Days and validation calls.

He would turn it to me and say, "Nate, you've been running operations for the business for our Salt Lake location. Get these guys going. Get these guys to be successful." I would run the trainings and help them understand what it was like to run the business, and it's amazing how different the business is from one market to another, and that's something we didn't quite understand — that not everything could be the same or very similar from our Salt Lake office.

We learned a tremendous amount of what it's like to grow a business in different locations. But pretty scary stuff, I think, in the very beginning when you realize these people are putting their faith and trust in you, and you have a proven concept, but it's only proven in one location and one market, and now you've got to prove it out all over the country.

Powills: As a finance guy, was it difficult to balance the economic model of franchising — where you trade full control and 100% of the dollar for a fraction in royalties — against the need to protect your culture and find the right partners who actually "own" the management?

Tew: I don't think we thought with as much intentionality around everything in the very beginning. I think it felt right to go into it.

As we talked to other franchisors and looked at the economics of growing a franchise, we saw that the path to profitability would often be longer because franchisees need time to grow their revenue. Royalties are limited in the beginning, especially in our business, where we manage long-term residential rentals and bring on one client at a time.

It takes a while to grow that business, 12 to 18 months to really get a business established, in some cases longer, some cases shorter. But we knew that we also wouldn't have as much of the upfront cost in terms of marketing for the business, right? Because that's one of the things a franchisor is able to take advantage of: you're really bringing in a real partner.

And they have their own business, and they're responsible for their own business financially, so they need to be funding their marketing. They need to hire people. They need to oversee the team. 

Traveling was going to be really hard for me if we were going to be going out to these locations and hiring the team directly. So we needed strategic partners that were present and vested and committed and dedicated to their business.

We could hire general managers, but there's a lot of capital output to do that, and also you could have them walk away, and you're stuck having to go out there and manage things on our own, as well as try to recruit new people. It just seemed like the path that made the most sense for us.

Fast-forward to where we are today and looking back, what an amazing decision that was because we've learned so much more about the economics of franchising and what that can look like. And we've had the blessing of having some amazing partners that have really transformed the way we even think about the business, the way we operate the business, the way that we approach our clients and customers. And I don't think we would have been able to do that if we hadn't brought in such incredible people. 

Nick, you talked about the culture. I think from the very beginning, we were much more intentional about who we are and why we do what we do, and we let that lead all of our decisions.

It's difficult to quantify sometimes and make quantitative decisions around culture, but there are a lot of qualitative discussions and decisions that we make to bring in the right people. You talked about our four traits, and that's really important to us. We're also a very family-first organization. For some people, that resonates really strongly with them, and they recognize they're getting into the business because they want to create more opportunities for themselves and their families.

When you get the right people in that are aligned in where we're going and how we're getting there, it becomes a question of: How are we going to fix this? How are we all collectively going to overcome this challenge? That's been pretty amazing. So, a little bit on the finance side, but much more qualitative and subjective things to get started initially, and then it's proven out to be a really wise decision for us to go down this path.

Powills: The morals or values or core values, whatever the term ends up being, a lot of businesses have them.

I mean, I can see that clearly it is your north star. I can see it in your body language, I can see it in your background, I can see it in the video that you put on the site. I think it's almost like, unfortunately, it's sometimes discounted to someone that doesn't know you because all these other businesses have almost used a fake north star in establishing it.

I think about in a world of today, whether it's through franchise brokers or it's using ChatGPT to find an answer, what you're talking about is really the next level intangible that, in my opinion, protects a franchisee when there's a rainy day, that you actually have a franchisor that actually cares about trying to figure out an outcome.

How do you get that story out there so that it's not just talk, that people can actually see there's a great business here?

Tew: I think really the culture is a combination of the words we use, the rituals we have, the behaviors that we embrace, the things that we do and the way that we connect.

And when people are looking at the business, they're looking at Keyrenter and the opportunity, and they're having some initial conversations, what we try to do is get them on the phone, on Zoom calls or whatever, with as many of our franchise owners as we can, reasonably speaking.

We have weekly validation calls where five or six different folks will join in and have a franchise owner there for some Q&A. And those intangibles start to rub off on people. We start to see that they're picking up on some of the common terms and language that we're using.

We recently updated our mission to "Changing lives one property at a time." This motto transformed how we approach our partnerships, residents and clients. By showing up with the ambition to have a positive impact, we create a "magnet effect" that attracts people aligned with our values while naturally filtering out those who aren't a fit.

It almost turns off the people that don't like that stuff.

Powills: Yeah, I would argue that the numbers come because of the people, and most businesses don't understand that. Because the reality is if you have guardrails and scaffolding for who can actually become a franchisee, they're going to do the same with their customers.

And if the Keyrenter difference to the customer is just one inch better than everybody else, then that's going to be reflected in volumes. And so it goes: bring in the right franchisees, make sure they're a culture match. They go out to the community and they're going to be one inch better than everyone else because they're going to have those values, which in turn is going to raise their average unit volume, which in turn is going to drive money back to the door. 

Tew: Absolutely. It really does start at the top, and the way that we're conducting ourselves as the franchisor, we're creating a culture and environment that brings people in who want to resonate with those same people and live their lives in a way that's according to the values and operate their business.

And then they attract the right kind of clients, and the residents just appreciate it, and it grows their business beyond just simple marketing and attracting people with the right properties. It's contagious. 

That's been a big payoff for us: we're not having to deal with a lot of reputation challenges and issues in a very difficult industry to maintain high-quality reputation and high-quality service because we have brought in great people that care a lot about outcomes, care a lot about people and care a lot about their own reputation.

For the most part, if we have what we might call a bad apple in the mix, they either shape up or ship out. That's what's happened.

Powills: I'm going to oversimplify this: my belief is that good behavior is the core values that you instill as a leader.

They come from one of two things. Either you came from a rough situation, something happened earlier in life that caused you to have this transformation, or you came from a great situation and great parenting that raised you. So my question to you is: what drove you to have this as your skill set as a leader?

Which pathway was it when you were younger?

Tew: I had the best environment and situation you could ever imagine. My dad is one of my all-time heroes, and my mom the same. Great parents, very involved, very engaged, very hardworking. My dad worked me to the bone when I was a kid and drove me to really appreciate the value of hard work.

I think my values were instilled through my parents, through church, religion and my core belief in a higher power. It drives a lot of that too. If we're honest and if we're doing the right thing, and if we're treating people with respect and kindness and clarity, having clear expectations around what we're doing and how we're approaching it, I saw that people's lives were better for that, and they were happier.

I'm now in my mid-40s, and I don't want to mess around and do business with people that don't bring me fulfillment and joy, and I want to have people that I like to be around. It becomes a selfish thing for me now.

Powills: When I look at the folks that I've struggled to work with, my intention is: How do I make you into your best self so you can go on, whether it's here or somewhere else, and have the best career you can possibly have? If I look back at what life was like when they were in their developmental years, whether it was 2008 and they're seeing their parents talk about being stressed because they're going to lose their job, or kids coming out of college now, watching their parents go through COVID and working nonstop, and not understanding how the world's going to work.

I look at these moments where kids are going through this time or this period, and then how they react later on. It's all theoretical, but I can see there are some kids who have awesome parents who continue to raise them the way that we're talking about, who now are entering the workforce, and they're phenomenal.

They might not have the skill set, but they just show up as humans. And then we have those who are resentful, like "I'm working for the man, therefore I'm going to take from the man." I think there's less gray area and it's more black and white, which should help the direction of who we say yes to as a franchisor in the future.

Tew: And they have a track record that shows that they're hungry, right? Their resume shows that they worked hard, and they've built or they've developed, and they give credit to others.

They're humble. They have some of those attributes that we're really looking for. It is interesting, though; we have some of the strongest, best youth of any generation today. And then on the other side, it really is more polarized than ever before. And I think there are too many safety nets today.

In just the way I'm looking at things, how do we instill in young people this idea that, if things go south, you've got to own it and you need to figure it out? 

We recognize when people are coming in and truly get the sense that they own this. In fact, our theme at our annual conference this year in Orlando, our summit, was "Own the Outcome."

And I think that sense of ownership and taking accountability as a franchisee is important. As a franchisor, we have our side of the table, too, that we have to make sure that we're owning, supporting, coaching and delivering what we say we need to do. But if franchisees come in and they sign the franchise agreement and they expect the franchisor to grow their business and do the business, that's not going to work because it is their business.

Powills: I have a keynote that I give at franchise conferences. It's all built on this book that I wrote, and it's called "Sticks and Stones." The theory is that greatness comes from transforming a pain into fuel or something that helps us break through brick walls. 

Tew: I like that. That's in line with where we were with the theme of our summit, and I think we have, for the most part, franchise owners that get that.

And then those that are still unfolding and recognizing and understanding that they can't wait for things to happen. It's got to happen. They've got to wake up every morning just knowing that, if they want to win, they have to show up and make it happen. If they don't bring that flame to the game and to the table, it's not going to happen.

Powills: Let's just say that someone is interested in betting on the jockey and the horse. What do you want someone to know about the business in closing thoughts?

Tew: I think people that are generally looking at Keyrenter as a business have some interest in real estate generally. That doesn't mean that they've been a real estate agent or a real estate broker. In fact, most have not. Some of them own rental properties. It's a great pathway to growing your own portfolio because you're working with clients and you understand the situations and when people are wanting to sell before anyone else does.

If you want something that provides recurring revenue, something that works because it's been around for so many years and it's got so many government protections on it. And even when the real estate sales market is down, our business is better because more people are looking to rent out their houses and rent houses.

It's not a sexy business. It's one that is getting more tech-forward and tech-focused, especially with repeatable processes that we have. There's a lot that AI is doing to make it easier for us to do our jobs. But what a great business it's been and what a great way to build wealth and create opportunities for our families through this business. If someone's interested in talking about it, I'm happy to hop on a call and get connected with our team.

Powills: Love it. Nate, what a great conversation. Loved having it. Appreciate you doing it. Thanks for being a part of this.

Tew: Nick, thank you, man. Appreciate your time.

Watch the full interview above or on YouTube.