The Nigerian real estate market is fuelled by lump sums and year-long tenancy agreements. Landlords are often worried about recouping their investment capital, and tenants living paycheck to paycheck are often worried about saving up continuously for rent—all of which make house hunting and renting a tedious hassle for everyone involved. With the value of the naira continually dipping, and the current economic situation in the country, a lot of Nigerians find paying rent to be too hard on their pockets; a lot of people would benefit from housing relief.
Operating in this space with an innovative solution is the proptech company RentSmallSmall. Using technology to optimise this industry, RentSmallSmall acts as a mediator between tenants and landlords, and proffers solutions that benefit both parties. We spoke to RentSmallSmall’s Co-Founder & CEO, Tunde Balogun, about this business model, the challenges they face, and how they are improving the real estate market with technology.
Tell us what RentSmallSmall is, and how it functions
RentSmallSmall is a property technology company that is transforming the real estate market in Nigeria by providing a seamless experience for its customers, who include property owners and renters. Our customers do not have to pay agency, legal or inspection fees. We make our properties available to be viewed via our website and mobile app, with customers able to schedule an inspection virtually without having to seek the help of an agent. There is also the option of virtual inspections, which gives sufficient information just 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 our landlords is the guarantee of verified tenants, steady income, and quality property management. Landlords are keen on getting the best tenants for their properties, and we help them achieve this using technology.
We pride ourselves on not just being a real estate company, but one whose vision, driven by technology, will drastically improve the sector and the experience of customers.
What inspired this business model and how did it take off?
RentSmallSmall was born from a need to give young people and professionals access to quality housing without the issues that come with renting. A gap was identified, which is a lack of flexible payment options for tenants who need homes but do not have the upfront payment required.
For me and my co-founders, it was about providing a solution and that meant tackling a system deeply rooted in culture and habits.
We believed the systems obtainable in other climes could also be had here in Nigeria. What was required was dedication and commitment to the vision. It is why we started to empower Nigerians with choice and access to quality housing, using technology, to give them peace of mind, and remove the stress and challenges that come with the entire process.
I have a background in business management and have conducted real estate businesses in Asia, and other developed countries. When I returned, I sought what I had experienced in other places, but could not access them. RentSmallSmall is more than a business for me and my co-founders. It is an important solution that everyone should have access to, and we are working hard to see that what we do becomes widely adopted in the real estate market.
What’s the biggest challenge you’ve faced getting this company off the ground? And how have you tackled that?
One big task we have faced is providing access to quality homes. The housing market is filled with poorly built properties, and it takes a toll on property managers because it means the bulk of our time is spent fixing issues. We have taken the hit for these issues and have received the vitriol of customers, though we do not own the properties. However, it is what fuels us, to see that people are able to live in homes where they are not inundated with issues such as this.
This challenge led us to launch Buy2Let, our own way of controlling the quality of houses available to be rented. Through this product, we have partnered with developers of high repute who are keen on quality, just as we are. The properties available on Buy2Let are made with quality materials, finishings, and fittings that guarantee that there would be no issues regarding the state of the facility, as we also ensure that the management of the facility lies with us.
In addition, we are introducing an emergency maintenance coverage that would enable property owners to have access to funds to fix issues such as electrical, plumbing, and other maintenance issues in their properties speedily. Solving our customers’ issues and the challenges we face is at the core of the innovations and new products we are rolling out for our customers, because we know that once they are fixed, the satisfaction of our customers will be guaranteed.
What role does RentSmallSmall play and how involved are you in the negotiations between landlord and tenant?
Prior to the commencement of businesses like ours, tenants and landlords have had to deal with their issues directly, with tenants unable to hold their landlords accountable to issues and other things that may arise in the course of their stay. Most landlords too were largely unbothered by tenants’ complaints, leaving the tenants to field repairs and other expenses that may come up in the course of their stay. Offering ourselves as the custodians of a vision that closes the gaps in the rental process and offers improved and better services to all is a very big role.
We are at the intersection of the landlord and tenant transaction, eliminating the need for an agent who is not involved after the house is rented. We interact with both customers on a monthly basis, which keeps us close to their needs and meeting them. Our system instills accountability on the part of the landlord in ensuring that all tenant issues are resolved. We also do the same for the landlords by getting vetted tenants that would meet the financial requirements required to rent a home and also get the right people for the property.
Doing this means that most issues are first brought to our attention, and due to our proximity to both parties, we are able to drive the resolution. This is critical for us because we are looking to have a system where there is transparency, trust and accountability, and we are holding ourselves accountable also to see that this is achieved.
A big part of moving houses is furnishing and paying bills. What perks does RentSmallSmall offer, and how does it differ from other proptech companies?
Furnisure is a product we offer that enables people purchase quality furniture for their new homes and pay flexibly over a stipulated period. This is part of our efforts to provide access to ease in getting and furnishing a home.
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.
For us, it is more than just renting and staying in a RentSmallSmall property, it is about optimising the entire customer journey and experience. This is what stands out as we walk with our customers through their journey and are continuously identifying ways to meet those needs. We have other customer perks in the pipeline to be launched soon, and we are very excited for their outcome.
What lessons have you gleaned from running a proptech company in Nigeria, and what insights do you have for anyone in real estate here?
Running a business in Nigeria, one that is driven by technology, has not been one with the best experiences. But the need is there and a commitment to the vision for which we started makes it easy to keep at it. We have learnt that confronting a system deeply rooted in culture and old habits will require more than technology. There is a need to continually educate those on the other side of the solution we offer, to make them partners in this mandate we have set on. We know it will not be instantaneous, but we believe in the power of one to multiply to a thousand through resilience and commitment. Yes, we are a property technology company, but we continue to remind ourselves that we work in a core area of human need—housing—and must not lose the personal touch required to make the experience wholesome. This is one thing all players must continue to keep top of mind even as they evolve their systems using technology.
What is RentSmallSmall’s biggest accomplishments to date, and what impact would you say your company is having on rent culture in nigeria?
One of our biggest achievements is proving that monthly rent payment in Nigeria is possible. When we started, it felt like a Herculean task, with people expressing their disbelief in the possibility of floating a business like ours. In the last 3 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 1-year rent upfront.
We have also proven that there is a huge demand for monthly rent payment in Lagos. Last year, we conducted an extensive survey which was widely published. The survey revealed that 88% of Lagosians want to pay rent monthly, highlighting the demand for monthly rental in the state. This survey would be a reference point for the state government as it announces the monthly rental scheme in the state.
In addition, we have 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 ₦550 million naira in these fees in the last 3 years. We are quite confident we can make this a norm, but we know change like this will not be instantaneous. So, it is why we continue to identify partners that share this vision with us and work with them to entrench this system into the Nigerian real estate market.
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. 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 an end-to-end investment solution to both new generation of investors who want a head start in real estate investment and the older generation who want to increase their investment portfolio. With these crops of quality properties being made available for rental, this would make a mark in transforming the sector.
Altogether, we continue to use technology to drive this change, because we know it’s a critical tool that can accelerate the growth of the real estate market.
Based on local and global real estate trends, what does the future of technology in the real estate market look like to you?
Technology is an important tool for driving change and the real estate sector has witnessed a growth of property technology companies rising to address the gaps and meet the customers’ needs. This will lead to an evolution of new systems where quality is never in doubt and all stakeholders are held accountable in their roles as players in the sector.
In the last few years, we have witnessed change in the listings and rental of property, with more property listing websites that make a wide range of house options available to customers. It has grown beyond that in recent times, with companies like ours, RentSmallSmall, who have come in and introduced new monthly rental options for tenants and landlords. This will drive transparency and accountability among all stakeholders in the ecosystem as more technological tools are employed.
What does the future for RentSmallSmall look like?
Our vision is to use technology to drive transformation in the real estate and property market. We have commenced this journey, and in the last 3 years have recorded significant progress. But the magnitude of change we envision would require so much more, and that is why we are constantly innovating and improving on our processes. Becoming a part of the Techstars accelerator program has opened our eyes to the business opportunities that abound for us and how we can maximise them to stay leading in the market. We also have other investors who have bought into the vision and helped us grow over the years.
We are working to create a system where monthly rental will be the norm, and people are able to have access to quality properties that become home. It is our plan to stay leading in this area, to become the partner of choice for people desirous of quality housing. We will work with other market players that can help drive this, because, alone, we can only do so much.
We will also become partners with our landlords and property owners by providing bespoke facility management, supporting them in their sustainable wealth creation journey, and ensuring that their properties maintain the quality they deserve. We will redefine the relationship to be more than contractual, but one where they are also driving the growth and transformation of the market.
Furthermore, we will expand our reach to other states in Nigeria because we believe that this is something everyone should partake of. We are working on our expansion plans too for other African countries. We see ourselves as growth drivers and will remain committed to this responsibility and delivering on the promises.