- Kenyan landlords and property managers are losing up to 30 percent of their monthly revenue due to a lack of automation.
- Most landlords lose revenue as they are unable to track and properly reconcile tenants’ payments from different channels.
- Additionally, landlords lose critical data including tenants statements, financial records, complaints, repair and maintenance data.
Automation in the lucrative housing business in Kenya is critical in plugging rent leakages. Sophia is a landlord in Kenya’s Mlolongo area, just a few kilometers from Nairobi’s Central Business District. Like many other landlords, she is constantly having to deal with reconciliation of payments every month.
The advent of technology adoption in the country has seen the cropping up of different payment avenues including mobile money transfers, bank to bank transfers and the traditional cash payments.
With a multitude of payment platforms today, it is easy for some cash to get lost or be unaccounted for along the way.
“It has become harder to keep track of all the payment platforms. To make matters worse, some tenants can opt to pay half the rent using one platform and pay the rest using a completely different payment avenue,” Sophia said.
Like many others, this is one of the challenges she faces as a landlord in Kenya.
Huge rent revenue losses
According to the latest data by Kiotapay, Kenyan landlords and property managers are losing up to 30 percent of their monthly revenue due to lack of automation.
The report indicates that most landlords in the country lose revenue as they are unable to track and properly reconcile tenants payments from different channels such as mobile money, banking agents payments and banking payments.
Additionally, landlords lose critical data including tenants statements, financial records, complaints, repair and maintenance data, which is critical in improving the quality of service they give to their tenants.
The landlords also have to wait for days, or even months before they can receive the collected rent and reconcile their books creating a backlog in their operations as they have no realtime visibility of the payment process.
According to Kiotapay Chief Executive Officer Paul Macharia, landlords and managers also struggle with low occupancy due poor marketing channels and low tenant satisfaction.
Automation of rent payment
The losses arising from rent leakages has driven Kiotapay to develop an digital platform that will enable landlords to aggregate all the moving parts in the real estate sector into one functional app.
“Property automation will lead to greater benefits for property rental investors. It will consequently improve their return on their investment. That means that the cycles of property units going without tenants will also reduce significantly. In the long-run the rental pricing will become affordable for the tenants. The landlords enjoying a 98 percent occupancy have no need of overcharging rent in order to stabilize their return on investment.,” Macharia said.
Launched in September 2021, the platform makes it cheaper and efficient for self-managing landlords to run their property operations end to end where they can screen tenants, create units, create leases, bill, collect payments and track their expenditure.
“Property owners and landlords currently using the app have improved their monthly collection by 18 percent and reduced their operational overheads by 13 percent. That means we have been able to pay back a whole 31 percent to our property owners and managers,” he added.
Kiotapay also integrates with smart water, electricity meters, and smart lighting for remote monitoring and control. This is especially useful for AirbnB investors/hosts who want to keep tabs with the water and power consumption for their units remotely without interrupting the comfort of their guests.
“We have a huge clientele from the Kenyan Diaspora market who bill their tenants and receive the payments remotely through our platform and later make payments either for their property expenses, pay loans and move money to other mobile phones or bank accounts,” Macharia noted.
Innovation in Kenya’s real estate sector
According to the report, the real estate sector is experiencing rapid growth driven by innovation.
Some of the emerging technologies in the property sector include Virtual Reality (VR) and Augmented Reality (AR) that allow potential buyers or tenants to experience properties remotely, providing immersive virtual tours and interactive visualizations.
Internet of Things (IoT), where IoT devices can be integrated into buildings, enabling smart features such as automated temperature control, energy management, security systems, and predictive maintenance. This technology enhances sustainability, operational efficiency, and tenant satisfaction.
“Other innovations in the sector include Blockchain technology that offers secure, transparent, and tamper-proof record-keeping systems. In real estate, it can streamline property transactions, digitize property titles, and enable smart contracts, reducing fraud and improving transparency while Big Data analyzes vast amounts of real estate data that helps to identify market trends, evaluate investment opportunities, and optimize property performance. It provides valuable insights for decision-making, risk assessment, and predictive modeling,” the report indicates.
Despite the huge investment of more than $144 billion dollars in Africa there is still a shortfall of 51 million housing units due to the mismatch as a result of the paucity of data that exist in the industry.
“For instance, there are rental houses that have an average of 65 percent occupancy while people are looking for suitable houses to move into everyday due to lack of automation in the rental housing market. Additionally, financial leakages in the management of properties such as unreasonable house finders fees, unscrupulous and unprofessional people posing as agents, and unreasonable pricing has led to further losses in the property market,” the report concludes.
