In 2014 Kenyan landlords reportedly began to shun the services of house agents.
The reasons for this aren’t farfetched. Typical of agents in many parts of Africa, they make huge sums off tenants unknowing to property owners.
So horrible are the experiences encountered in the hands of these agents that tenants or home seekers prefer to deal directly with the landlords.
But what might seem like a new chapter for home owners and seekers in Kenya is about to open.
It begins with Ronald Ngoda, a Kenyan citizen who came up with the idea of Rent Hero Kenya in the wake of 2019.
Taking the edge off
“I have always been passionate about finding solutions that will grow people’s businesses online. My major interest is providing online payment solutions to clients using mobile money.” Ronald Ngoda begins.
It is in pursuit of this passion that Ronald together with Cyrus Mbithi, a UX designer, designed a software to address lease management troubles. They also had support from Aggrey Sayi, a marketing and sales enthusiast, and Janice Nyokabi who acts as the customer care relations.
The resulting startup, which is Rent Hero Kenya, now assists landlords and property owners to manage tenant records, streamline billing, as well as collect rent. Conversely, tenants are also offered the ease of paying their tenancy and utility fees through a wide range of payment options.
The system is able to generate automated SMS reminders to notify tenants to pay up their tenancy bills. In addition, it runs an e-wallet that allows landlords track rent payment and also be able to withdraw funds to their M-PESA or bank account.
Ronald says the e-wallet enhances transparency and makes management easier, although some landlords are still set in the traditional ways of collecting rent.
But for those who use Rent Hero, they are able to access all of the services through the website.
It’s a win-win situation
Rent Hero Kenya operates a business model that allows it to charge users 5% on all rent payments made through its system. Interestingly, according to Ronald, people aren’t put off by that percentage charge. Instead, more people are getting confident about the service.
“Rent Hero Kenya runs a payment solution with no setup cost and also provides a 60-day free trial period with full features to all customers. This is accompanied by uninterrupted customer support with timely response rate,” Ronald explains.
With barely only four months into operation, the startup has made revenue of about 1,150,000 Ksh ($11,131.20) from its active client-base which comprises of 100 property owners.
Ronald goes on to explain that the revenue estimation is not hypothetical, but instead from actual transactions done via the system. For instance, each of these property owners have an average of 50 tenants. That alone puts Rent Hero’s user count at 5000 monthly.
“One thing that has worked is that we continue striving to have a good reputation and earn more trust. This is why we are glad that most clients we have approached are positive about our solution and have joined us,” says Ronald.
Scaling the hurdles
Rent Hero Kenya plans to expand its business to other African markets including Nigeria, Tanzania, Ghana, Uganda and Angola.
Ronald boasts about Rent Hero Kenya having high growth. Hence the reason why the startup is planning to extend its billing solution to businesses outside real estate.
“We plan to partner with other creative agencies that are offering financial solutions online to make our product more diverse and effective to use anywhere in the world.”
In all this, Rent Hero Kenya isn’t without any challenges. You’d particularly expect a self-funded enterprise to have its own share of struggles, especially when it comes to financing its operations. Indeed, this is quite the case as Ronald admits. This is a challenge Ronald attributes to the difficulty startups encounter in accessing grants in Kenya. Nonetheless, he remains positive.
“We have a keen interest to partner with financial institutions and investors to scale up operations in terms of improving our service offering and increasing customer base,” says Ronald.
But for now the focus remains to generate enough revenue while looking towards prospective investment.
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New Report: Nigerian startups raised $24.7 million in Q2 2019, 40% higher than Q1. Find out more in the latest quarterly edition of the Nigerian Startup Funding Report here.