When Knox Financial launched last year, the housing rental market looked different than it does today.
However, doubling down on digital growth, the Boston-based residential rental management startup is expanding into the Lone Star State, offering its investment property platform and services in Dallas and Houston, as well as Atlanta.
“Customers come to us generally in one of a few situations in life … and when they’re moving they say, ‘Well, this home I own is my best investment, why would I sell my best investment?’” Knox CEO and co-founder David Friedman told NTX Inno. “Then they realize holding onto that home is a lot of work. They realize, ‘I want to take advantage of this investment without taking on a new job.’ And that is what Knox does.”
The company assists homeowners and private landlords in renting out their property. Its Frictionless Ownership Platform simplifies and automates the marketing, tenant communication, rent collection and property management process, while helping users track the property’s financials and finding the best cost structure for rent.
Friedman said that in addition to private landlords, the company’s customers largely include middle class younger people looking to move to bigger spaces to fit with their lifestyle needs and older people who are looking to downsize while still getting a return on the house they own.
Founded in 2018, Knox first launched it services in Boston in 2019. Since then, the company has been steadily growing, landing a $3 million seed round led by Greycroft in late January that brought the Knox’s total to just under $5 million. At the time of the funding, Knox had reach more than $200,000 in recurring revenue, according to Crunchbase.
The Texas expansion comes on the heels of similar moves the company has made this year in New England. Friedman said the company was planning to make the announcement sooner but had to delay due to the pandemic. However, he said by de-emphasizing its physical presence and focusing on building virtually, along with taking lessons learned from previous expansions, the company is planning more expansion news in the near future.
“Our plan is to be in all of the major cities in the U.S. in the next five years,” Friedman said. “What we really learned was even during a pandemic we can expand into a new market. ... We learned how to launch and operate in these markets and it almost didn’t matter that they were right next door, we were never really traveling to them ... that gave us the freedom to go after the markets that we really wanted to be in.”
Even though the majority of Knox’s team is based out of Boston, Friedman said the expansion into new regions will include at least one new hire in each local market. Since its launch, Knox has more than doubled its staff to 14 and plans to onboard three more soon. Friedman said the company has had its eyes on Dallas and Houston for a while, due to their scale and other real estate market factors.
“People who own property and have access to the mortgages and the leverage that comes with owning property, that’s one of the biggest investment opportunities in the market today.” Friedman said. “We know property is how the wealthy have built their wealth – a huge percentage. And we want to make that opportunity accessible to everyone.”
