HouseMe launched in 2016 to become South Africa’s first mobile application and web portal to allow landlords receive bids on their rental properties from prospective tenants eager to secure their ideal accommodation. The application allows landlords to rest assured of the quality of tenants they are potentially renting to as tenants are rated, those with better ratings fair better while househunting using the platform.
South Africa also historically suffers from racial tensions, the remnants of which are still exhibited by a few today. The HouseMe team has also set out to use their platform to combat this vice by eliminating racist or sexist behavior in the housing market.
TechMoran spoke to HouseMe to learn more about how they endeavor to reach their goals.
Tell us about yourselves; your team, your educational and professional backgrounds
The founders, Ben Shaw and Kyle Bradley, are as diverse as they are driven. Shaw’s background is in Finance and Accounting, and he spent the early part of his career as an investment banker at JP Morgan Chase in Johannesburg. Prior to HouseME he had started a number of small ventures and graduated as an Allan Gray Orbis Fellow in 2013. Bradley studied computer science and was involved in a startup right out of university, leading the internationalization of their core product. Both Shaw and Bradley grew up in Cape Town and studied at UCT.
HouseME’s team has expanded to almost twenty within the last two years; with product, operations and support teams that serve the entirety of South Africa. The team’s diversity is a real strength of the company, with eight languages spoken and diverse prior experiences ranging from post-grad MBAs to global teaching, management consultancy to property studies.
How would you best describe HouseME, what does it do?
HouseME is a digital platform that connects prospective tenants to landlords with full automation of the letting agency process and fair and transparent rental pricing – all for a fraction of traditional fees. HouseME disrupts the status quo using technology to solve for admin-intensive processes, high vacancy rates, return-eroding intermediaries and chronic lack of counter-party trust.
What market gap did you spot that motivated you to start this company?
HouseME’s original genesis was in 2015 wherein Shaw’s frustration with the inefficiency of rental pricing resulted in his building of a placement-pricing tool, similar to an auction. HouseME’s PlaceME Tool is now a fully-fledged mechanism that allows tenants to place offers above and below the landlords’ asking prices and ensures fair market dynamics determine rental. This is especially critical in South Africa, where HouseMe fights against the legacy of apartheid by completely eliminating racist or sexist behavior in the housing market. This is absolutely what motivates the founders, day after day.
Who is your target market?
We work with private landlords who buy to let residential property. Our full suite of services means that we can operationalize an asset more efficiently and for far better value than any competitor in the market. We appeal both to new investors who want a complete solution, and to those who are confident in their rental pricing but want to de-risk their investment via our Rental Guarantee. Interestingly, we now have a number of businesses signing up to use our services too – agents and property portfolios are keen to enhance their yield and reduce their risk! Tenants are of course the other side of the coin. We serve them wholeheartedly and expect every HouseME rental to be a great experience – from our digital lease to our 24/7 emergency response.
How does your company make money, what are your revenues so far?
HouseME charges a commission of 2.5% – which in many cases is a quarter of a traditional agency. In addition, there are two opt-in packages that are made up of manual services, available to landlords who want a fully hands-off experience. These are R2,900.00 and R3,900.00 respectively and provide a range of services including photography, inspections, variable property billing and emergency call-outs. With our incredibly strong vetting process, we are able to offer landlords a Rental Guarantee (which covers three months’ rental should a tenant that HouseME placed default) for a further 1.0%, and we see almost 100% of our clients opting into this product. HouseME’s revenue, property and user growth has been phenomenal, and although the business has only been operational for ~18 months, it already signs on each month the equivalent of an entire traditional regional franchise.
Who would you say is your major competition in this space at the moment?
Traditional agencies, and a few international PropTech companies that we follow very closely. In South Africa, we’re still sheltered from international tech powerhouses, but of course that’s both a blessing and a curse – generally, the SA market is a little apathic and the reluctance to switch to technology-driven products might keep competition out but also slows down our client conversion!
What is your vision for the company in the next 5 years?
HouseME will have launched a number of home-related products and services and be the trusted destination for great landlords and tenants. HouseME will likely be one of the largest three rental agencies in South Africa and have expanded into two new markets.
What advice would you give upcoming entrepreneurs?
Find mentors and invest in those relationships. Read to learn all the time: Zero to One and The Hard Thing and Hard Things are excellent starting points. Be aware of the sacrifices you have to make, and go in with eyes open. Build a support system of friends, family, and co-founders. Be open about the struggles you face, and trust other founders to offer support and guidance. Keep having fun.