Tunde Balogun is a co-founder and Chief Executive Officer (CEO) of RentSmallSmall, a property technology company. In this interview, he says through its innovations in the real estate sector, his firm has proven that monthly rent payment which is being advocated in some quarters is possible and more beneficial to both landlords and tenants. Excerpts:
How are you leveraging on technology to make inroads in the real estate sector?
What we do at RentSmallSmall is driven largely by technology. We are a property technology (proptech) company on the journey to transforming the real estate market, and technology is critical to realising this transformation.
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A key solution we offer our tenants is a seamless rental experience from house hunting to moving in. We have cut off the need to pay any additional fees such as legal, agency and inspection. We make our properties available to be viewed via our website and mobile app, with customers able to schedule inspection virtually without having to seek the help of an agent. There is also the option of virtual inspection which gives sufficient information like the physical inspection. This is all driven by technology which shortens the time it would ordinarily take to conduct these activities in the traditional rental system.
What we also offer landlords is the guarantee of verified tenants. Landlords are keen on getting the best tenants for their properties and we help them achieve this via technology.
We are rolling out more initiatives for our customers that will further provide ease for them and enhance their experience. We pride ourselves on not just being a real estate company, but one which vision, driven by technology, will drastically improve the sector and the experience of customers.
Three years in this space, how has the journey been?
Operating in a sector like real estate comes with peculiar challenges. We are dealing with a core human need – shelter – and so recognise the huge responsibility we have in ensuring that we deliver excellently. Real estate transactions are marketplace transactions, and in a very broken and disorganised rental market like Nigeria where expectations between vendors and subscribers are worlds apart, coming in as a player to manage and align the expectations is a tough job. We’ve chosen a tough problem to solve: one that saw one or two players who came before us giving up. We’ve been in business for three years now and our successes are based on our resilience and commitment to understanding the problem and staying on course to solving it, and interestingly our customers, both landlords and tenants, are early adopters of our solution.
But the big task for us now is providing access to quality homes. It has always been an objective for us to be the gateway to quality living, but we know quality living can’t be completely achieved without quality housing. The housing market is filled with poorly built properties and it’s taking a toll on property managers because it means the bulk of our time is spent fixing issues. This challenge led us to launch Buy2Let, our own way of controlling the quality of houses available to be rented. It is also at the core of the innovations and new products we are rolling out for our customers, because we know that once this is fixed, the satisfaction of our customers will be guaranteed.
In addition, the harsh economic realities facing the country impact us direly. Due to the sensitivity of the service and products we offer, we have had to deal with the rising cost of essential goods and services which brings its own demands that impact the business. This would require that we make decisions that ensure we do not run our business down and keep our customers satisfied at the same time. We constantly identify measures that are fair to all.
What major achievements have you recorded so far?
One of our biggest achievements is proving that monthly rent payment in Nigeria is possible. When we started, it felt herculean, with people expressing disbelief in the possibility of floating a business like ours. In the last three years, RentSmallSmall has proven that monthly rent payment is possible in Nigeria, and we did it against all odds; and today, it’s on record that we’ve never paid any landlord one year’s rent upfront.
We have also proven that there is a huge demand for monthly rent payment in Lagos. Last year, we conducted a survey which was widely published. The survey revealed that 88 per cent of Lagos tenants want to pay rent monthly. This survey would be a reference point for the state government as it announces the monthly rental scheme in the state.
In addition, we’ve ensured our customers do not need to pay agency, legal and inspection fees as part of the house hunting process. We understand that this is a huge frustration for the Nigerian renter, and we stepped in to stop that, saving people over N550m in these fees in the last three years. We are quite confident we can make this a norm, but we all know that changes like this will not be instantaneous. So that is why we continue to identify partners that share this vision with us and work with them to entrench the system into the Nigerian real estate market.
As noted earlier, quality housing is a major challenge. We are not a company focused on providing housing alone, we are keen on making sure that quality housing is offered. This has been a major challenge confronting the industry over the years, and there has not been so much done in navigating it. For decades, home builders have built bad houses, landlords have built with substandard materials or bought from bad developers and traditional real estate agents have stayed far from addressing the problem, rather they’ve pushed landlords to demand one to two-year upfront of rent, settled for their 10 per cent to 20 per cent commision with zero to little work done, and they’ve left tenants to carry the cross of maintaining the properties.
With the result of the survey, we realised it would take monthly rental arrangement to transform the system as tenants will have the flexibility to shine the light on the problem and immediately demand change. Our monthly interaction with customers, tenants and landlords helps us demand accountability from landlords to ensure that their properties remain up to standard.
To further drive the change, we launched Buy2Let, our retail property investment product, and inserted ourselves in the production of homes by working closely with developers who build well. In turn these properties are available as end-to-end investment solution to both new generation investors who want a headstart in real estate investment and older generation who want to increase their investment portfolios. These quality properties being made available for renting would make a mark in transforming the sector.
What specific innovations have you brought on board that have met customers’ expectations, which also stands you out in the industry?
Last year, we did a survey to find out what makes a happy landlord and a happy tenant. For landlords, receiving their rent on time and creating wealth with their real estate assets topped the list. For tenants, having issues resolved on time and getting the services they paid for were topmost.
We have also introduced the “Emergency Maintenance Coverage”, a type of insurance that allows landlords access funds to fix issues such as electrical, plumbing and other maintenance issues in their properties speedily.
We are introducing a first of its kind “Landlord Dashboard” that gives them insights on the state of their buildings, their appreciating or depreciating values in the marketplace, and educating them on what are required to keep their properties up to standard. Through this dashboard, we will rate the properties using set measures on a regular basis. Our goal is to work closely with the landlords in taking care of their properties and ensure that they remain of the highest quality.
Conversely, we are introducing a “Tenant Dashboard” that will enable them to log in complaints and track the resolutions. This enables us to have quick access to our customers’ complaints and resolve them quickly, working closely with the property owners through the Emergency Maintenance Coverage.
We have also partnered with a financial institution to introduce an embedded finance credit product, wherein our tenants can access funds with low-interest rates to meet up with their needs ahead of their monthly salaries. We are committed to ensuring that tenants on our platform are empowered to live with peace of mind, and so are partnering with them to get the lifestyle they desire.
