reOS: Rental Gets a reOS Proptech Boost

The weak economic climate in South Africa – present since 2008 – combined with the hefty impact of the pandemic on the spending ability of much of the population has led the country’s property market into dim territory. Rental vacancies are up, timeous payments are down, property prices have not grown significantly in a decade, and the appetite for moves has been dampened and delayed. The rental industry specifically has faced big challenges. Landlords have struggled for some time to place suitable tenants and now that task is intensified as the country deals with unemployment figures above 32%. When income drops, the ability to pay rent decreases – it’s a simple calculation. But industry pros are hopeful that the situation can turnaround.

 Sandton-based TPN Credit Bureau said in March that landlords who rent out properties between R7,000 and R12,000 per month are seeing just over 83% of their tenants paid up, but tenants in the lower brackets – rentals below R3,000 per month – are still struggling; with just over 65% paid up with landlords. The figures improved through 2020 as the strictest lockdown rules were lifted, but financial fragility in the lower segments of the market will remain a concern for some time.

 Finding quality tenants, simplifying processes, and helping to ensure streamlined financial vetting is more important than ever.

 This is where reOS comes into its own. A proptech company with software that makes life for rental agents, landlords, and tenants much easier, this South African business is ready to grab the world’s new opportunities by utilising modern blockchain technology – a form of database that stores a large amount of information in an order that is easy to access and manage.

 CEO of reOS, Craig Buckley tells Enterprise Africa that while there have been issues to navigate in the property sector, it is one in which demand never diminishes.

 “The impact of the pandemic has been a bit of a mixed bag within the property industry, in that there has no doubt been some very real challenges around realities such as a general deterioration in tenants’ ability to pay rent timeously,” he says. “However, these challenges have been offset by exciting new opportunities for businesses like ours, and the value of having a good rental agent managing your property has really been highlighted during these tough times. At the end of the day everyone still needs a roof over their head at night and as a result the intrinsic demand is still there. While we have observed the average rental value per lease decline in real terms of late, this shift is also is also starting to stimulate an uptick demand.”

 PROPTECH

 In January, Just Property CEO Paul Stevens told Business Tech that the buyers, sellers, landlords and tenants will be looking for more value in the services that are offered to them, leading to a more competitive business environment in 2021 and beyond.

 For reOS, this is welcome news as the company looks to begin its mission of ‘positioning agents as the heroes’ of an incredibly tough industry.

 “reOS has been in the making for several years, and we will always be looking to improve on the current systems,” says Buckley. “The rentals space has an ever-expanding list of intermediaries who require either transactional rails or a layer of services that evolve and shake up the ecosystem between tenants, landlords and agents. Our blockchain architecture allows for this complexity and flexes additional functionality in payment reconciliation for every lease on the system.

 “Data is the cornerstone of our platform and accuracy is therefore essential,” he adds. “This is why our platform is built in cutting-edge technology, using the blockchain. Our hyperledger and bank-grade encryption ensures all data is secure and perfectly reconciled to the underlying leases under management, at all times. I can’t overemphasise how very valuable this is to agencies who struggle to find, monitor and manage hundreds of leases each month. Scale is finally within reach, without massive spend, for agencies.”

 The earliest iteration of reOS was Rental Connect. As the company grew and transformed after initial investment, new designs and new service offerings were added making the business unique and difficult to replicate.

 “reOS champions the rental agents by providing them with powerful tools that have the intelligence to automate and grow their businesses to unprecedented scale,” explains CCO, Ben Shaw. “In particular, the ability to automatically reconcile all incoming funds to the correct tenant and schedule the associated outgoing payments (with full transparency) saves agents from their worst week of the month. Feedback from previous versions has also resulted in our crafting a world-class, efficient workflow for agents to manage multiples of their current book size. This appeals to franchises who are seeking to grow their business yet maintain data-rich access and reporting controls.”

 Opportunities for growth in the service portfolio have already been identified and as the uptake of the system increases, reOS will become more powerful and more intuitive.

 “reOS is actively engaged with partners in various parallels. Marketing of inventory, maintenance, legal services, eviction procedures, arrears management and collection, housekeeping, research insights and financial services are all within our short to medium-term roadmap. We are also busy piloting some innovative new products, and have had success with a few pre-approved lending facilities,” says Shaw.

 BUILDING BLOCKS

 reOS, which claims to be designed for people and built for business, is already growing. Built for rental professionals, offering a fully branded experience, the software allows rental agents to free up their time to focus on delivering outstanding customer service. This is the real business pitch the company makes to agencies.

 Development of the underlying technology had been ongoing for some time, but last year – during the height of the global pandemic – the reOS brand was introduced. Since then, marketing has been a major focus for Buckley, and more recently for Shaw who joined in 2021.

 “We have been in stealth mode throughout our Beta phase, and only publicly introduced the reOS brand to the market in October 2020. Happily, the switch is now turned on, and we’ve already seen encouraging adoption as we start to leverage our established distribution networks,” says Buckley.

 “Given that our technology stack scales cost-efficiently, we are able to offer a competitive price point for far more value than traditional competitors. Our customers pay processing fees, which means they only owe us as and when they themselves earn their fees.”

 For Shaw – an experienced proptech entrepreneur and former banker – there is much room for optimism following several successful client success stories over the past few months.  

 “One such example came from the latter part of 2020 and involved a rental management team which unfortunately had to halve their staff compliment during the lockdown, and yet – powered by reOS – managed to grow their rental business operations by 43% in less than a year,” he details. “This really gives insight into the step-change available to agents when switching across to the reOS platform.”

 As reOS continues to expand and its benefits become more obvious in South Africa, there is an appetite from Buckley to hit other markets where demand is already building.

 “reOS has been purposefully built to integrate via API to global service providers,” says Buckley. “So yes, international expansion is very much part of our plans. We have already had a few approaches from potential international partners and we will announce expansion in due course.

 “reOS is proudly South African and it is therefore only natural for us to initially focus on the local rental market as our primary case study. As we own more of the local market, our international appeal grows, and we will move ahead with our plans to be on three continents within the next five years.”  

 BETTER RENTAL

 As the pandemic abates and global vaccination programs bring protection to populations, businesses will look to regrow or build on any success that was realised during 2020. With this growth comes more jobs, more economic activity, more spending power, and increased demand for property. The spending power of most should improve as the slow process of opening economies allows a return to a more normal trading environment, but companies will always be in the lookout for opportunities to improve efficiencies. reOS offers exactly that and would have likely been successful in a pre-Covid environment where businesses were already looking for such improvements. Selling the concept to rental agents and larger landlords who have worked with legacy systems for decades can be hard, but now more than ever productivity and the ability to work remote are in the spotlights.

 “There are always challenges with getting businesses to adopt new technology and adapt their historic ways of working,” admits Buckley. “However, the pandemic has actually played in our favour in this regard, as the industry has been forced to look for innovative ways of working, and agencies that were previously resistant to change are now actively seeking to switch to technology that enables them to drive greater operational efficiencies, enables a distributed work force, and supports a paperless ecosystem.”

 Using reOS, processes are automated, payments are one touch, transactions are secure, and complete control is retained at all times – no outsourcing vital tasks to expensive contractors. Buckley brings much of the concept from the fintech world and has found the move into proptech refreshing.

 “Just over three years ago, I made the exciting and very rewarding switch from the financial services sector to focusing on customising cutting edge fintech solutions for the very niche needs of the real estate industry.

 “I was initially involved in launching industry-first disruptive financial services products that aimed to replace the intermediary. It was during this season that I realised that the real magic happens when you use technology to tool both the customers and the industry professionals, so that everyone can enjoy a better experience and ultimately create enhanced – and in this case unprecedented – value for all parties.”

 Alongside strong investors, including Bill Paladino and Mark Forrester, Buckley’s idea of keeping agents in the loop and avoiding a direct-to-consumer-type model has helped to drive interest in reOS while staying off the immediate radar of competitors.  

 He says that the input from investors has been invaluable and, like with many tech start-ups, has helped to push the business to a new level much quicker.

 “Early investors were hugely influential in establishing our pilot Rental Connect and introducing us to our first few hundred clients. Thereafter, the team has developed and executed strategy without their executive involvement. Our shareholders have been a real asset, particularly in developing out our growth strategy; contributing both funding and property networks.”

 Because of this platform, reOS has been allowed to blossom and, even though markets and figures have resulted in difficult reading for those in the property sector, as the economic backdrop improves, the company will be utilising its technology to unlock new avenues for considerable growth.

 “During the measured and comprehensive product learning phase, in parallel, we established a number of significant strategic distribution partners. So as a team we are excited to now shift our focus to leveraging these channels and we will be growing our already meaningful annual recurring revenue base by five times within the next two years. This will be on the back of customer growth, which includes unlocking some new market segments, and be compounded by several new revenue streams being activated,” confirms Buckley.

 Time will tell if reOS can gain enough traction to dominate its local market, and if so, there is a window of possibility that it could move quickly to impact the international rental scene, making processes faster and easier on the power of blockchain. With ambitious targets, reOS aims to quickly become the leading proptech software platform, helping clients to be more efficient while having more time to focus on customer service.