Nigeria has been battling housing issues for years. According to experts, only about 20 percent of Nigerians own houses. Consequently, there is an estimated 28-million housing deficit, which requires about N21 trillion to tackle. So, Tope Adewoye, a professional with a wealth of experience in the financial and technology sectors, has established an initiative known as Rentease. He said that it was born out of the need to help people to get affordable rentals. Before it was established, Adewoye who is the managing director at Rentease said that the team visited Kenya, South Africa, and Ghana to conduct some simulations.
In the exercises, Europe was exempted because the team wanted to compare what they were doing in Nigeria and what their counterparts in other African countries were doing. The discovery was that rentals in these countries were monthly. In Nigeria, it was different. A lot of people struggled to pay their rent, running helter-skelter when it was time (usually at the end of the year). This was what brought the idea of the initiative. “We want to bring a system where people will now be used to a monthly contribution for rent,” he said.
Plan is to instil the culture, then facilitate monthly rentals.
So, because it was (and still is) not the culture in Nigeria at the moment, the company is bringing in finance first. Once the team brings in finance, they instil that culture in the tenants to finance the annual rents, while people pay back monthly. What Rentease is doing, in essence, is building a monthly culture of rental payments into people. As time goes by, the firm will become like a partner between tenants and landlords.
Once the culture is built, people who are already used to monthly rents will then be facilitating monthly rentals in Nigeria. Adewoye reveals that this is the bigger picture for the company. But for now, finance needs to be brought in to harness that. On what he meant by “bringing in finance,” he denies partnering with banks but said that the firm has liquidity which is being used to support the project. He said that landlords were not used to monthly rentals, but the company wants to build a culture step by step. And then, the team would go to the landlord and start educating them on the importance of monthly rent. Once that is done, Rentease will offset annual rentals, while the tenants pay back monthly.
Systems put in place targets salary earners for now.
Concerning the standard of rentals, Adewoye said that the company has all categories of standard houses on its platform as far as it suits customers’ style. According to the director, properties put out on the platform are standard properties. “There are some properties that when you look at them, you know that they are not suitable for a salary earner, which is our target audience for now,” he said. The company is targeting the salary earners at the moment.
Furthermore, in terms of default and securities, the company has put systems in place. This is because it is a representative of both the tenant and the landlord, and the tenancy agreement on the platform is signed between the landlord and the firm. As a result, Rentease is the subletter. In basic terms, the firm is the tenant of that property, who then sublets it to people for monthly rentals. That is the arrangement we have with the landlords and the tenants. Adewoye said that a time would come when a customer has to sign a sub-tenancy agreement with them because they had already pre-signed an agreement with the landlord posting their properties on our platform.
Insurance is included in customers’ deals when renting.
Also, the properties are insured by insurance partners that the company works with. Therefore, Rentease gives its customers insurance coverage in case of death, sickness and critical illnesses. Finally, the firm’s internal staff, which are called Super Agents, have been given a target to get a direct mandate from landlords. They source properties from the landlord directly. The company has also engaged some partners who are members of the Association of Estate Agents in Nigeria so that they are provided with workers which the firm recruited on its payroll. These people have the job of uploading the properties directly. In terms of salary, the company does not discriminate but advise customers based on their debt-to-income ratio.