South Africa’s property technology (proptech) market is gaining momentum, as landlords are leaning on digital solutions to manage the residential rental sector.
This is according to tech entrepreneurs, who say the evolution of the residential rental market has opened a gap for enterprising ideas that are assisting landlords and tenants with property maintenance and management.
South Africa is experiencing a boom in proptech, as witnessed by the birth of start-ups such as Preferental, DigsConnect, Instant Property, PropertyFox and established players like PayProp, a payment platform for rental agents.
Globally, there are now more than 6 000 proptech businesses, and Statista, a global data platform, reports that global proptech investments have increased in recent years.
“The residential rental market is already going through a technology-related transformation, which has not disenfranchised property managers who have embraced change. Rental agents are adopting technology solutions at a rapid pace,” says Jan Davel, PayProp CEO.
“Our latest annual state of the rental industry survey, which canvassed agents and other property professionals across South Africa, found that 89.3% believe tech to be a worthwhile investment, and 60.2% had increased automation at their own businesses within the last year.”
Davel says PayProp has so far seen the positive impact of proptech. “We think we played a big part in helping the industry weather the COVID-19 storm. During lockdowns and business slow-downs, PayProp has helped enable home moves to continue unabated by enabling distributed work for rental payment administrators.”
Alexandria Procter, co-founder of DigsConnect, a digital student accommodation platform, says: “There is so much inefficiency in the market, and optimising efficiency is where technology thrives and has its best applications.
“We've generated hundreds of millions of rands in lease value for landlords and completely changed the way students find a home before heading off to university. We've helped landlords fill up their stock, expand their portfolios off the backbone of our platform and we've only just started. There is so much opportunity here.”
DigsConnect now lists 1.3 million beds worldwide and recently secured a multimillion-rand investment from Launch Africa, Goodwater Capital, Five35 Ventures and Delta Ventures.
The funds will be used to spearhead international growth, with a focus on helping African students in the UK and US secure more affordable, convenient and safe housing.
Ross Fitzcharles, CEO of Preferental, a virtual real estate agency, says: “South Africa is ripe for a change and disruption within the property space. I think property management in residential rental is outdated, and it’s just right for companies like Preferental to take that opportunity and create savings and efficiencies that we can pass on to the landlords.
“There are massive opportunities for start-ups and other players in this space to use technology to empower the landlord. We are starting to see movement in the property space, which is exciting.”
Fitzcharles founded Preferental and has been operating in property tech since 2017. His start-up was born out of the frustration his parents faced with their tenants.
“We provide an effective lead management system with WhatsApp integration, making it easy for landlords to connect with their potential tenants. We assist landlords with professional tenant vetting, digital lease agreements and collection of deposits and rentals,” he says.
“Our Preferental app makes it easy for landlords (or authorised proxies) to conduct thorough property inspections that are immediately saved to their dashboard for future reference.
“Landlords also have the full support of a professional team managing their rentals monthly, making it easier to grow and scale their own property portfolios.”
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