Due to the massive informal rental market in South Africa, a group of local property developers recently launched a new app, the Indlu, which promises to connect homeowners in townships with potential tenants for their backyard rooms.
The free app allows homeowners to register their rooms, and prospective tenants are then able to bid the room. Payment occurs via the app directly, or through pay points located at a nearby participating shop.
But the app is more than just a room-renting app, explained Cobus Truter from Melana Developments, whose team developed the idea. Owners can also work with Melana to develop the backyard room from a shack-like structure into a proper dwelling, which the owner contributes to paying for by entering into a rental share with Indlu.
The first backyard unit was rented via the app in December of last year. Truter said in an interview, “Since launching publicly in December with our Beta version of the app, we have successfully processed multiple rental payments and our first client already qualified for a property-upgrade investment.
“As opposed to normal shacks built in backyards that provide many homeowners with an income, clients qualify through the app to enter into agreements in which we build the informal structure into something like a small multistorey apartment building.”
“We then split the rental for the period we engage in, which is normally over five years, whereafter the full rental amount is paid to the owner.
“They then own the asset that has considerably increased in value, their income has increased significantly, and critically needed rental housing is provided to the community. On top of this, we are creating a healthy return on investment during the five-year engagement period.”
The idea for the app was sparked after Truter’s company built a shopping center in Kaalfontein in the Tembisa township, and developed a close relationship with the community, gaining invaluable insight into the market.
The app is currently only available in Tembisa, but the team is engaged in talks with people in similar areas around Cape Town, to take the initiative further.
The app is available for Android and can be downloaded here.