HouseME, 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 average.
These are impressive statistics considering that credit bureau TPN recently published its latest rental monitor report, confirming a further decrease in the number of residential tenants 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 usual 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 Guarantee 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 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 interested 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.
- 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.