Meet Tunde Balogun: CEO, Rentsmallsmall
You may pass by the Chief Executive Officer of RentSmallSmall, Tunde Balogun, and not recognise him. But his creative mien and astute candour will undoubtedly make you steal a second glance.
The journey of his vision was long cemented before he obtained a degree in International Business Management and master’s in Business Administration at Stamford University, in Bangkok, Thailand.
He said, “In 2012, I was privilege to be a recipient of Clinton Global Initiative held in Washington DC. I am a Global Ambassador for JumpStart Africa, an empowerment programme for young Africans and an executive with Youth 4 Change initiative. Prior to RentSmallSmall, I co-founded Unique Edge Management, a property management company based in Bangkok with a portfolio of over 100 properties in the US and Thailand, before I returned to Nigeria in 2015.’’
He noted that the unpleasantness associated with finding a suitable, affordable choice apartment in preferred locations in Nigeria and the absence of a flexible system for rent payment led to the establishment of RentSmallSmall.com.
“RentSmallSmall was birthed out of hunger for a change in the rental business in Nigeria. Having being exposed to the ease of renting an apartment in different countries, I knew I had to come back home and do something. The vision was clear from the start and it is to make renting houses in Nigeria very flexible and so we designed a model where tenants can pay their rent either monthly or quarterly as against the one-year existing plan.
“In a nutshell, we are in business to use technology to improve rental experience by giving Nigerians a life-changing value which provides hope, quality, easy access to property, saves time, reduces risk and cost,’’ Balogun states.
On the vacuum his company came to fill in the nation’s house rental sector, Balogun said his visits to 18 countries showed that uncommon cases where a tenant who earned salary monthly was required to pay one-year in advance for an apartment.
According to him, when he returned to Nigeria two years ago, he was shocked to see the country still being backward regarding flexible rent payment.
He added, “Not only was I told to pay a year in advance, I also had to pay agent and agreement fee. This is not how it is done in developed countries. The first company I worked with was Unique Edge Management in Thailand and we subsequently expanded into the United States of America. We had over 100 property we managed in Thailand and USA were we rented out apartments to people coming into the country either for business, education or tourist visit and they all had options of monthly payment.’’
He further explained that RentSmallSmall.com provided a unique win-win plan not just to tenants but also to property owners, adding that tenants enjoyed on-budget housing, flexibility when on lease and rent payment either on monthly, quarterly and annually basis.
Balogun said, “The unique plan helps when it comes to selection of suitable apartment close to work or place of business and also reduces delays in finding such apartments and less bureaucracy for move in modalities. On the other hand, Property owners get steady, reliable income throughout the year.’’
On how to change Nigeria’s rental system, the CEO of RentSmallSmall, advised, “Let me state that we are not the first in the business of flexible payment, but our model definitely stands us out. I can’t categorically say it will take a certain month or year to change the rental system in Nigeria but it is my hope and believe that soon enough, the government would prioritise shelter in Nigeria which is one of the basic needs of man. The Minister of Power, Housing and Works, Babatunde Fashola, is highly in support of flexible payment and that is a good start.’’
The vision of RentSmallSmall is not limited to Lagos or Nigeria alone as Balogun notes that the organisation’s desire was to spread its professional tentacles.
He stated, “At the moment, we are in Lagos, mostly on the Island but we need more property owners to come on board so we can cover every part of Lagos. We also expect to expand to Abuja in few months. In the next few years, our dream is to go beyond Nigeria because other African countries are also experiencing same problem.
Explaining the workability of the firm’s plan, the CEO said it’s essentially driven by technology and focus.
He added, “As stated, we are highly technology driven and not like the typical traditional estate agent. We work directly with landlords. Our business model works in a way that landlord gives us the base rent of the property on annual basis and then we mark it up by a certain little percentage and with that mark up, we break it down into monthly payment.
“The landlord gets 92 per cent of the rent while we take eight per cent. This is where the good news comes for tenants because from the eight per cent, we pay insurance which protect the tenure of the contract. This is to ensure the tenant is protected for certain months against default. A default could come as a result of job loss, critical illness or accident and the landlord benefits here. With RentSmallSmall, everyone benefits.
“For rent seeker, when they come on our platform www.rentsmallsmall.com, they are exposed to varieties of property and the amount range. Once you find the property you want, you then have the option of choosing either monthly, quarterly or biannually. Before we accept a tenant, we take him or her through a verification process. We will find out what he or she earns, the source of their income and how consistent it is, proof of identification, and we do our documentation. This is done to ensure that whoever is renting a property from us is eligible. The landlord then gets a comprehensive report on our investigation which helps to give him an informed decision about the tenant.
“Once that is done, the tenant pays the first one month rent and another one month as a security deposit. The security deposit is called caution deposit which is refundable as clearly stated in the agreement.’’
On what the response of Nigerians to the initiative, Balogun observed that the demand was huge and the response so far indicated that Nigerians were desperately waiting for the change to happen.
He also said some people cannot afford to pay huge annual rent and therefore choose cheaper houses far from where their workplaces which ultimately affected their productivity at work.
He stated, “From our research, it was discovered that the default rate among tenants is 71 per cent in Lagos. This means people renting a place and not being able to pay subsequently and one of the reasons is that people begin to think about paying their rent when it’s almost close to when the active rent is due.
“This is why we are the solution, with our package, you don’t have to wait till your rent is due as we help tenants manage their payment in a convenient manner.’’
Shedding light on why he started the firm in 2018 having returned to Nigeria since 2015, Balogun alluded to the saying that Rome wasn’t built in a day.
He stated that he had to engage do lots of research to see how Nigerians and landlords would welcome the idea being a technology-driven company.
According to him, the organisation, on a daily basis, gets new and verified tenants and it currently has a good amount of tenants but hoping to have large number before the middle of next year especially if homeowners list their property on the firm’s platform.
Recalling how he got the firm’s name, Balogun explained that he desired a unique, short and easily relatable name and since the platform allowed people to pay their rent monthly, he decided to coin the name out of a popular saying ‘’pay small small.’’
Besides, noting the country’s harsh economic climate, Balogun said passion and desire to create a change was his motivation.
He noted, “I did my research well and I knew it comes with lots of challenges but the need to be a solution giver and impact positively on Nigeria made me come back. The economy is harsh no doubt but still there is enormous potential for growth in the real estate industry and it only takes a determined mind to tap into it.
He also said Nigeria only needed to get it right in Nigeria because real estate is a lucrative business in any part of the world.
“The players in the industry only go for the maximum return without giving value. An industry can only grow when it gives value to its users. Development and regulation in the real estate sector in Nigeria is in shambles because some players in the industry are only interested in immediate returns. And because of this, there is no creativity and quality of services and materials have depreciated. In Thailand, a developing country like Nigeria, it is no longer luxury to have a swimming pool in an apartment because the players in the real estate industry are value oriented unlike in Nigeria where having a pool in one’s house is still luxury and that need to change. For an industry that is the fifth contributor to Nigeria economy, it definitely has a potential for growth if strategies and proper planning are put in place,’’ he added.
On his goal for the country’s real estate business, he said his goal was to transform the rental market in Nigeria so that people could have access to affordable homes both for lower and upper classes to engender productivity and improvement in the quality of life.
He added, “The ultimate goal is to be a force in the property development market by championing creativity in how space is being utilised and designed.’’
Examining the stories of the partnership between his firm and Axa Mansard Insurance, the CEO disclosed that Axa provided insurance to RSS’s tenants, adding that the synergy had proven to be quite appealing to landlords.
He said, “Our partnership with some established key players in the industry has so far been mutually beneficial. In the aspect of getting property for lease, it has contributed a great deal to the varieties of property on the platform.’’