Tope Adewoye is a professional with a wealth of experience in the financial and technology sectors. Currently, he spearheads key projects, showcasing his versatility and leadership abilities. As the Chief Operating Officer at Conglex, a blockchain and payments-focused venture, he brings his expertise to the forefront of cutting-edge technologies. He also holds the position of Managing Director at both Build Now Pay Later, a real estate initiative, and Myrentease, a proptech startup. In this interview with IFEOMA OKEKE-KORIEOCHA, he speaks on how they are building a monthly culture of rental payments into people through Myrentease. This is in a bid to cushion effects of economic downturn in Nigeria and enable people pay for their rents without hassles.
Tell us briefly about the ideology behind Myrentease.
Myrentease is a passion born out of the need to help people to get affordable rentals. I will give you a background of what brought about Myrentease. We’ve been to different African countries like Kenya, South Africa, and Ghana, just to do some simulations.
We didn’t do Europe because we wanted to look at what we are doing in Nigeria with our counterparts even in Africa. So we’ve been to different African countries, East Africa, South Africa, some countries in West Africa.
And what we observed was that rentals in these countries are monthly. So why is the case in Nigeria annually?
So when we came back to Nigeria, we felt everybody is used to annual rentals in Nigeria.
We then did another simulation to find out if this was a problem for people. So we observed that a lot of people struggle to pay their rent. When it’s time for people to pay their rent, people start running helter-skelter to pay their rent.
So that’s what brought about the idea of Myrentease.
We want to bring a system where people will now be used to a monthly contribution for rent. So we are bringing in finance in the first place because it is not the culture in Nigeria at the moment.
So once we bring in finance, we will instil that culture in the tenants to finance the annual rents while people pay back monthly. So what we are doing, in essence, is building a monthly culture of rental payments into people.
As time goes by, we will now be like a partner between tenants and landlords because once we build the culture, people who are already used to monthly rents will now be facilitating monthly rentals in Nigeria. That is the bigger picture for Myrentease. But for now, we need to bring in finance to harness that.
What do you mean by bringing in finance? Are you partnering with banks?
No, we are not partnering with banks but we have liquidity that we are using to support this particular project. Landlords are not used to monthly rentals for now, but we want to build a culture step by step. And then we would go to the landlord and start educating them on the importance of monthly rent. We will now be the ones offsetting that annual rentals while the tenants will be paying back monthly.
What standard of rentals are you looking at? And what are parameters put in place to ensure that the tenants do not default in payments?
In terms of the standards of houses, as far as it suits your lifestyle, we have all categories of very standard houses on our platform. Properties put out on our 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. We are targeting the salary earners.
Let me take myself for example. When I started my career in early 2011, I got my job in Ikoyi but I was coming from Sango in Ogun State, the reason being that I couldn’t afford to pay the annual rent somewhere closer to Ikoyi. So I had to work for several years before I moved to Yaba, somewhere a bit closer to Ikoyi.
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So in terms of standards, we will give you the standard that you require on the platform and it won’t be something stressing you because you are paying monthly from your salary. So we would have offset the annual rentals.
Now, in terms of default and securities, these are the systems we have put in place; because we are a representative of both the tenant and the landlord, the tenancy agreement on the platform is signed between the landlord and us, so, we are subletting the property to the tenant. So, basically we are the tenant of that property, we would now sublet it to people for monthly rentals. That is the arrangement we have with the landlords and the tenants. It will get to a stage where you are going to sign a sub-tenancy agreement with us because we have already pre-signed an agreement with the landlord posting their properties on our platform.
The properties are also insured. We have insurance partners that we work with. So whenever you are coming into our platform, we are giving you insurance coverage in case of death, sickness and critical illnesses.
And our risk appetite, for now, is only salary earners. So the rate of default will be minimal because we already have a payment system connected to your salary account. So once the salary is coming in, the repayment is happening.
This idea is not a culture in Nigeria and I am seeing a challenge already. Have you sold this idea to landlords and what are their take on this?
We have our internal staff, which we call, Super Agents. So their target is to get a direct mandate from landlords. There are some platforms that before you know the real agents to the landlords, you would have contacted three to four agents. So our internal staff target is to source properties from the landlord directly. So what we did is simple. We engaged some guys who are members of the Association of Estate Agents in Nigeria so they gave us some guys, which we recruited on our payroll, so they are the ones uploading the properties directly.
We have had that arrangement with the landlord to sign this tenancy agreement and the landlords are assured of the person we are bringing to their property. Landlords have this fear of who is the tenant occupying their property. This fear will be eradicated because we have profiled the tenants and we’ve qualified them to be good people. We do credit reports on them as well to be sure that they are in good standing.
What category of salary earners are you targeting?
So, in terms of salary earners, we don’t want to discriminate. Now, there’s something we call debt to income ratio. For anybody that comes to our platform, even if you earn N30,000 then you are now looking for a 7 million naira house, you know that is not possible based on your salary. We would advise based on the salary you earn because we would have done that calculation and advice on the kind of house you should go for. So if you still insist that you want to live in a house of N7 million, we would advise you to increase the particular contribution amount they are willing to pay. If it was at first, 30 per cent, we would advise you to increase it to like 50 per cent so that your salary will be able to accommodate the remaining 50 percent.
Apart from Myrentease, what other products do you offer?
We have different exciting products in the real estate industry –
Quick Shelter. This gives completed houses to people. There is also Build Now, Pay later. This is for people who have lands and want to build. Quick shelter is for people who want to get completed houses. Now, I want to buy a house, but I don’t have the complete funds. What we do is tell you to pay a certain percentage of the value of that property, so while you pay them a certain percentage, maybe 30 percent, the remaining 70 percent will now be spread maybe between 24 to 36 months. However, if you cannot still cover the payment within this period, we have a team of guys who can help you source for mortgage from our mortgage partners.
So in terms of Build Now Pay Later, this is for people who have lands but couldn’t build them. So what we do is we can help you first perfect the title of the land. The second thing is that we can suggest structures that you can build on that particular land. So, what we do is give you the total estimated cost of building that house, you give us 30 percent of that particular cost, and then the remaining amount is spread over time.