When 31-year-old Ahmed Adnan scoured the ends of the internet to find an appropriate platform to rent an apartment in the city, the hunt was nothing but “humiliating,” he said.
Adnan and his soon-to-be wife were apartment hunting for a place to be their future home in Maadi. They began searching online to gauge market prices and property supply, but to their surprise, the process was extremely tedious.
“We looked at multiple online listings and faced multiple hurdles. Sometimes, the property location listed online was wrong, the website listings were outdated, the apartment pictures and description did not match what we saw [in real life] – it was a very humiliating experience,” Adnan recalled.
Home renting is typically a hands-on experience, from meeting the broker and touring the property to meeting with the property owner (who wants to make sure renters will take care of the property and pay on time) and negotiating the lease.
Digitizing such interpersonal service is a challenge. On top of that, the complexity of the process and the multiple stakeholders involved makes it even more strenuous to digitize. However, it is not impossible.
Digitizing property leasing
In recent years, artificial intelligence has allowed services in various sectors to automate their processes. This wave has rippled into the property leasing market, paving the way for websites like Airbnb, Vrbo, and HomeAway since the mid-2000s.
Digital property rental platforms allow customers to set budgets, access virtual viewings, make virtual offers, and attend online vetting interviews. Customers can also sign a digital lease and receive access to their home via the internet of things (IoT), apps, and QR codes. Examples of long-term or residential rental platforms include UK-based Get Living, Blue Ground, The Home Like, and the European long-term rental platform HousingAnywhere.
In Egypt, digital long-term property renting barely scrapes the surface of the digital transformation scene, with many websites simply serving as third-party platforms that allow users to gauge market price and book in-person viewings with the leasing entity. But is the market ready for the next step?
According to CEO and Co-founder of JustPack Ahmed Kassab, “The market is already there and wants something like this [digital residential platform].” Egyptians are already adopting digital solutions because of their efficiency and optimized processes, he told Business Monthly, but there are hurdles to overcome before a long-term home rental platform can succeed.
Kassab’s company has taken a baby step in that direction. JustPack is a short- and medium-term property rental platform headquartered in Egypt, focusing on vacation home rentals in the North Coast and El Gouna. The company also provides property management for “JustPack Owners,” handling inspections and maintenance, booking schedules, payments and customer services. Travelers can use the AI-driven search engine to find properties, while owners can track their finances and bookings.
“The primary reason for picking such a niche is because it is an in-demand service with an accessible audience for a brand-new product,” Kassab said. “Targeting long-term rentals require a completely different marketing strategy and customer personas. It is significantly more difficult to acquire because they are mainly expatriates or internal immigrants.”
The number of internet users alone is incentive enough to digitize long-term residential rentals. The Ministry of Communications and Information Technology’s latest ICT Indicators bulletin shows that Egypt’s internet penetration rate is nearly 73%.
The demand is clearly there: Since its launch in 2020, JustPack has seen a six-fold jump in bookings, and currently has over 250,000 users – up from 400.
Challenges to digitalization
“The greatest challenge to digitizing long-term property rentals in Egypt is increasing digital literacy among stakeholders – leasers, real estate brokers, homeowners, and government bodies – and securing their trust. If done right, this could be groundbreaking for the real estate industry,” said Ahmed Abaza, CEO of Synapse Analytics.
Cybersecurity and internet fraud in emerging markets like Egypt often force customers to think twice before making any online transaction. Because long-term property rentals are innately a high-ticket transaction – one with higher stakes, customers are even more wary of spending money on a property they have not seen yet, Abaza explained.
For this reason, JustPack introduced a one-minute video feature – a cost-effective solution to virtual property viewings that use 3D rendering technology or 360-degree imaging like Google’s Street View – to give would-be renters a tour of the property.
“Having top-notch customer service to support renters during check-in and check-out processes and throughout their stay is also vital to secure a hassle-free leasing experience,” Kassab added.
This form of customer service support can be replicated for long-term stays, Abaza noted, using AI to help property managers predict when residents might face maintenance issues.
From the service provider’s perspective, financial feasibility is the main limitation. The long-term property renting process is labor-intensive because of viewing bookings, Amr Yassin, chief growth officer and co-founder of JustPack, explained. “Scaling such operations to long-term rentals requires a heavy cash flow because integrating such technologies is very expensive.”