Real Estate Investor Magazine South Africa September 2018 | Page 24
PROPERTY MANAGEMENT
Using
Automation
to improve rental collection rates
H
ouseME, a disruptive property technology company
that launched in 2016 and quickly began reshaping
the South African rental marketplace, has released
their latest rental collection statistics showing that on-time
rental collection are nearly 30% higher than the national av-
erage.
These are impressive statistics considering that credit bu-
reau TPN recently published its latest rental monitor report,
confirming a further decrease in the number of residential ten-
ants who pay rent on time.
In spite of this nationwide declining trend, HouseME has
managed to maintain a national average of nearly 83% of rent
being paid on time by tenants. This is significantly higher than
South Africa’s average, which according to TPN and PayProp
is less than 64% of tenants. While many have attributed this
in part to the VAT increase and general financial constraints
in the current economic climate, it does raise questions around
whether more technology is needed in the property sector to
counter such declining rental collections.
So how have HouseMe managed to buck the declining
trend? As a tech company, HouseME uses smart technology
to vet tenants and collect rent, allowing them to work with
increased precision, at scale, and for a fraction of the usu-
al cost. Ben Shaw, founder and CEO comments: “Although
many landlords will feel the pinch of South Africa’s dip in
on-time rental payments, those using HouseME won’t notice
it at all. This is because we offer a 3-month ‘Rental Guarantee’
which ensures that landlords are paid on time every month,
regardless of when the tenant makes the payment. We pass on
the benefits to our landlords in the form of our Rental Guar-
antee and low rates, and to our tenants by requiring only 1
month’s deposit.”
Furthermore, TPN’s report shows that out of the tenants
who do pay late, approximately only half will end up paying
the balance within 30 days. That means that on average, 18%
of South African tenants don’t pay the full rent. HouseME’s
latest figures show the company has been able to bring those
delinquency numbers down to an average of 2% for its own
tenants after one month and 1.3% after two months. That
translates to an overall rent collection rate above 98%.
Currently, no rental agency automates almost every step in
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SEPTEMBER/OCTOBER 2018 SA Real Estate Investor Magazine
the process of finding and placing tenants, from posting ads to
booking viewings online, from vetting applicants to paying the
deposit with the click of a button. In the event of multiple in-
terested parties, the company’s digital “PlaceME Tool” ensures
that landlords get the best price and tenants don’t face any
discrimination. HouseME is a South African first, and costs
landlords as little as 2.5% of rental.
Since it was first founded in Cape Town in 2016 by two
young South African entrepreneurs, HouseME has achieved a
nationwide footprint and grown twelve-fold.
Source: Houseme.co.za
KEY FACTS
Less than one fifth (17.1%) of HouseME’s rental is
received late from tenants. This is less than half
the national average of one third (36%) of tenants
paying late.
Only 1.3% of HouseME’s rental is still outstanding
from tenants after 2 months. This is over ten times
less than the national average of 18% of tenants
not paying.
Four fifths (82.9%) of HouseME’s rental is paid on
time by tenants. This is almost 30% higher than
the national average of two thirds (64%) of tenants
paying on time.
Almost all (98.7%) of HouseME’s rental ends up
being paid in full by tenants. This is almost 20%
more than the national average of 82% of tenants
ending up paying.
HouseME’s fee from 2.5% of rental is less than half
the industry average of 6%.
HouseME’s property portfolio is growing by around
13% per month, and its user base of prided tenants
and landlords is growing by 750 new users a
month.