How Technology Is Changing the Way Dubai Pays Rent

SPEAKER_1 (0:00)

It's the Morning Drive. Dubai's rental market is evolving, as tenants face affordability pressures, and landlords are looking for greater certainty.

Takeem is using rental guarantees, property data and technology to address some of those risks. Today, Rakesh Mavath is the co-founder and CEO of Takeem, here to talk about the forces reshaping the rental market, what the data is telling us, how tech could, hopefully will, change the way landlords and tenants transact for the better. Rakesh, good to meet you.

Rakesh Mavath (0:35)

Thank you, good morning, and thank you for having me.

SPEAKER_1 (0:37)

You're very welcome. Let's start with how your rental guarantee works, and a little bit on what the problem it's solving. It's solving a problem between landlords and tenants, isn't it?

Rakesh Mavath (0:48)

Correct, I mean, there's always been a massive mistrust between landlords and tenants.

SPEAKER_1 (0:52)

It was ever thus.

Rakesh Mavath (0:53)

It's always seen as a zero-sum game. Myself and my co-founder, I was a tenant. I had the issues of being a tenant. She was a landlord. She had the issues of being a landlord. But we didn't want to create a zero-sum solution. We believed that there was a win-win solution for it. And the first step on that path was the Takeem rental guarantee, which is the first rental guarantee in the GCC. Now, it combines three different elements. You have the rent protection, which protects landlords against defaults. So if your tenant doesn't or can't pay, we cover up to six months. It has an emergency maintenance-ish part of it, so that's 2,100 dirhams per year per unit. So no more waiting for something to get fixed. You just call a hotline within two hours. Someone comes out and fixes it. The third part of that was the digital direct payments, which we are using through the UAE Central Bank direct debit system.

Now, for each different stakeholder, there's the benefit and the problem that it's solving. We originally created this problem from having conversations with landlords, understanding their pain points, wanting to mitigate the risk.

But it's actually being used in a very different way in the market, depending on the time frame and depending on who's using it. So for the landlords, it gives them that certainty. They know their rent is guaranteed no matter what. They're getting lower vacancies, they're getting higher yields because of the maintenance, plus the ability, because this product gives them the confidence and security to switch to monthly, which has always been the issue before.

So that element of it. For the tenant, he's now getting security, flexibility, affordability, plus those quicker maintenance. Both of them are getting the ability for digital payments. For agents, it's closing deals faster because obviously a monthly tenant pool is much larger than someone trying to find that one check or four checks.

And for the regulators, it means less cases are going to rental dispute committee because we don't even allow the process to go that far. We saw that as a major pain point. Protection doesn't work if the pain point is still there where you have to go to rental dispute committee. You have to wait five, seven months hoping that your tenant is still in the country. This product now allows the tenant and the landlord to have a stressless conversation about when life just throws those unforeseen circumstances. Let's say it's a job loss. What was the situation before? A tenant would go to the airport and fly out. If they were a good tenant, they would call the landlord when they're out of the country and say, that check's not going to bounce. Otherwise, the landlord's just finding out about it when the tenant checks bounce. So this allows them to have that conversation and allows both of them to be in a position of security and safety.

SPEAKER_1 (3:30)

So it seems like a win-win, but we've got to get past, and we're still not past yet, are we? The situation where the check mindset.

Rakesh Mavath (3:42)

It is, and habits are hard things to break. And you have to understand why it's a habit. So traditionally, to entice people to move over here, the companies would be paying your rent. They'd be paying your school, they'd be paying your rent. Sure. They could pay in one check, right? Landlords haven't been able to price the risk on a tenant, especially a very transient economy.

So that element of risk for the landlord has been why they've never really taken to monthly payments. We do have some of the biggest asset managers in UAE that offer monthly payment. They've got the bank balance to be able to do that and be able to handle the risk. For anyone below that level, that risk was always a problem. So convincing landlords that their rent is protected at the same time has opened the door for them to offer that affordability to their tenants.