 Brandon Rubin. I'm an entrepreneur from Durban. The suburbs of Brea and Morningside are built on a natural ridge that overlooks the home of the sharks, the Mozambique Stadium, Durban Country Club. It's just got an incredible art look elevated over the city. Living in Morningside makes so much sense to us because everything is so central. Anything that we choose to do is a couple of kilometres away or a couple of hundred metres away. Restaurants, coffee shops, it's all here on our doorstep. You know, we've got great schools here. The Girls School's just close by our Maristella and Durban Girls College. And then, fantastic boys' schools, Durban Preparatory, High School, DPHS, one of the top primary schools in the country, and then Kifton, which now goes all the way to High School. It's so convenient to be in this area where everything is close by. Some of our closest friends stay just across the Amgeni River from Durban North. Durban North is very family-orientated with some great schools, some excellent restaurants, and some small commercial centres. The promenade along Durban's beachfront, also known as the Golden Mile, got an incredible facelift for the 2010 World Cup, and today is used by all of Durban's population. We as a family love the Durban Beachfront. If we're not on the water, we'll find us on our bicycles along the promenade. Being a World Cattle Board Champion, I've travelled to some of the most amazing beaches around the world, but nothing comes close to what we have here in Durban. Durban has great weather and great conditions all year round for surfing and for training and just being in the ocean, and that's why it's known as the warmest place to be. We've lived here our whole lives, and there's no place we'd rather be, and this is our neighbourhood. Welcome to Episode 29 of the Private Property Podcast. I'm your host, Zaman Dunga. On day 56 of the national lockdown, and the Reserve Bank has slashed interest rates by 50 basis points, so that reparate has been cut. And of course, next week, Monday, we can look at the different ways that you can go about saving money because of this cut. I know in previous episodes, when the reparate has cut, we have looked at what this all means and the different ways that you can take advantage of it. And of course, that was that episode with Pales as well as Lindile, but we looked at how interest rates, how the interest rate cut, rather, can be taken advantage of if you're in a property stockpile. Of course, even as an individual landlord, there are different ways, or an individual investor, there are different ways that you can go about taking advantage of that interest rate cut. Now, on this evening show, I'm joined, re-joined, by Gil Sperle, who's the CEO of Flow, of course, who had him on Episode 1. So many episodes later, he joins us again. He was one of the first guests that we had with Zekimi Eza on that Episode 1, when we were actually looking at the impact of COVID-19 for the renter and the landlord, and the different ways that they can go about withering the storm. Of course, at the time, we thought that we're only going to be in this for 21 days. And now we've seen that it's obviously not 21 days. And really, they give us really great, insightful tools and even tips on how we can make sure that we're able to meet each other halfway as their landlord and the tenant. And they also did something. So, of course, everybody knows that Gil is the CEO of Flow, a prop tech company, and they've essentially conducted a survey that has uncovered that 37% of South Africans, South African tenants on their database aren't able to pay their rental in full. And a significant 22% cannot pay their rent at all. Now, we're joined by Gil to really help us through some of their findings. They conducted the first ever Flow finding survey that he tells me they want to be able to do on a quarterly basis. And tonight, we're looking at how this COVID-19 crisis has effectively affected tenants. If you're a tenant, or even a landlord, share with us how this is effective. Do you have you been able to pay your rental on time the full amount? Or were you able to negotiate a lower rate with your landlord? Landlords, have your tenants been paying in full? Or have they been asking for that reduction? Gil, thank you so much for joining us this evening. I think maybe briefly, you know, if you can just take us through what Flow is for those of us who probably, you know, might not know some of the views at home, who probably didn't watch that first episode when we started off. And how it came about that Flow conducted the survey? Yeah, sure. So Flow is a rental platform, where tenants are able to conduct their rent journey end to end all the way from finding their apartments down to a monthly rental activities, paying their rent via the app, engaging with the landlords, buying a bunch of services that are relevant. And they get rewarded the better they are as tenants, they get access to better deals. And then of course, it also means they get access to better listings when it's time to put them to search. So since we we've gone live as a as a business about a year and a half ago, we've grown to about 85,000 tenants on the platform. And the, you know, once COVID-19 hit us, we realized that we're probably one of the biggest communities of engaged tenants during their lease, probably on the continent, you know, as a concentration, but especially in South Africa. And we've got the ability to actually go and ask them how COVID-19 has affected them. And we almost felt responsible that we should try and gather that information and try and inform the industry as much as we can. You know, so I think we're all in it. And like you say, some of the landlords are getting hit tenants are getting hit. And we, we were quite aware of it in that first episode a while ago, but it's the data is coming out now, makes it absolutely certain. And, and it's quite devastating. So really, we found that that we'd like to inform the industry with what we know so that we can all come together and have some insight about what to do about it. You know, maybe, maybe perhaps for, you know, viewers at home, if you could share an overview of the audience who participated in this particular survey. Yeah, so, you know, of those 80,000 or so tenants, we're very much focusing on what we call generation rent, who are people that are generally between age 22 to 35. And our, you know, first, second time job is generally earning around 1520,000. So the average rental is five to 7000 random month. But our demographic is more so those that participated in the survey are really between 22 to 42 or so. And the rental payments or the rent amounts every month really range all the way from 3 grand to 15 grand a month. So we got a very good representation and a good enough statistical sample for us to be quite sure that it represents tenants in South Africa as a whole. And I think, you know, maybe if we could almost zoom in on some of those finders, some of those findings rather, perhaps if you could share some of the most striking ones, I mean, I know that the nature of the data, I've had a look at the, you know, at the report and there really some meaty stuff that, you know, essentially came out of that report, perhaps share with our views at home, some of the most striking insights that we're able to gather with your team in the survey. Yeah, so I mean, one of the first questions that we asked is trying to establish really financially high as COVID-19 affected you, and therefore has it affected paying your rent. So the one striking number is that 78% of tenants income has been affected. So it's just only just over 20% of tenants who have not been affected by it. So I mean, you could really say that more than most people are somehow suffering from what's going on. You know, and we went a bit deeper to try and understand, well, if that's the case, how are you affording to pay your rent and are you paying your rent, right? So like you said earlier, there are 37% of people who outright cannot afford to pay their rent at all. They have been quite dramatically hit. Consider also that, you know, rent is your biggest expense every month, generally 30, 40% of your income. So most reprieve or most pain would come from that big chunk, right? Or most reprieve would come from saving on that big chunk. So there's only 37% of tenants who can really afford to pay their rent and out of the rest. We've got some really interesting data of those that have still been hit by, you know, financially, asking them, well, then how are you affording to parents? And some of the answers are that some people have savings, few don't. I think most don't. Some are borrowing money, friends and family and, you know, making it work. And then some are just some are getting loans. And of course, some are just not able to pay at all. I think the last point on that part was, was what then happens post lockdown, right? So, generally, about five to 10% of the market in a given month are looking to move and are moving. That's just because the average duration releases around 18 months on average. But now that's tripled. Right? So our data says that 32% of people are considering moving. Now, that is probably a symptom of what's going on. For one, there's a backlog, because we've been under lockdown for two months now, you know, so that 10% before is every month. So it's added up, you know, so there's the surge. But more than that, people probably have to downgrade, they have to move somewhere that they can afford. And further down, perhaps, we can unpack it a bit later. We can see that how landlords have responded, how landlords have tried to help and give some reprieve and many can't or won't. And therefore, people have to move. So once lockdown is out, we're going to see the data is telling us we're going to see a lot of movement in the market. And you know, Gil, I actually wanted us to go there, because I know one of the key findings is that landlords have accommodated 35% of renters with reduced or waived rent. And this is of course, individual landlords who've proven or rather have proven to be more forgiving of the attendance, perhaps share with us some of the things that landlords have been able to essentially do or respond to the attendance not being able to pay either in full or at all. Yeah. And to go a bit deeper on the numbers there, the questions we asked were, have you had the conversation with your landlord? Some people have not at all. Most people have so three quarters of people have already discussed it with the landlords. And we split those people up into those whose landlords are institutional, you know, companies and portfolios, and those that are individual landlords. So the call it moment pop market to have an apartment or two as an investment. And you're right. The data is skewed to much more flexibility on that individual landlord. Right. So then to answer your question, some of the things that they've done is reduction of rent, or waiving of rent, but I guess deferring of rent. And sometimes those conversations are even about where is it that you can trade. So if we deferring rent, or if we're reducing rent, let's exchange it with with extending your lease so that I have at least a bit more as a landlord, I have at least more, a longer lease and lower risk. And so those are some of the techniques and some of the conversations that are happening. The opposite side of those conversations. And it's much fewer landlords, especially the individuals are much more clinical responses. So especially the companies in general, not all that we know of a lot of companies, some of them are clients who are actually being very proactive and very flexible and very approachable, but a lot are responding clinically and saying, well, our agreement, our agreement, and we're going to have to start taking legal action. That is also happening, but far less than most. And you know, I remember in episode one, we're actually talking about having a proactive approach as a landlord or the or even a tenant in making sure that you start that conversation with your landlord, because already as early as back then, you could see, I think back then we're, we're less than six days into the lockdown, we couldn't really see that, you know, this, this, the pandemic was going to affect the property market in general, but particularly landlords and tenants, because so many people were of course going to either lose their jobs or have their salaries cut. If you could even share, you know, the different ways that tenants have found in trying to raise the money to pay, especially those who are probably, you know, currently facing retrenchments or their, you know, their salaries have been cut. What other ways have they tried to find in terms of, you know, meeting their landlords halfway? Yeah, so you see, I do remember us chatting about it, and it's, it's really just been validated with, with the data now is those conversations are crucial. And a lot of our insights towards the end of the report shows that if there's one thing that you can do is have the conversation, right, because we're all it's a people element. And we all understand where we're each coming from. And COVID-19 is affecting all of us, right? And therefore, it's reasonable to have the conversation. So, and it's, you know, again, it's showing that most people have had the conversation already. And they are being creative around what are the possible ways that we can make it work. So I'm actually just going straight into the data to be precise. But so there are, there's a bunch of tenants who have actually applied for the different subsidies that the government is providing. So there's a quarter of those are in search for that sort of reprieve. The government, you know, we know that there's the $500 billion package that's split into all sorts of different ways that they can assist everyone. And people are applying for it. There's, then there's like the friends and family and borrowing money. Some are able to dip into savings. And we like we said earlier, most don't have savings. And some are just really just finding a middle ground of what it is that they can afford. And that requires some level of transparency, right, and reason, you know, so that's, that's where we hope that there can be most, you know, sort of agreement of how it is that one can make that work. And, you know, just to add on the opposite side of it, where in that conversation, the landlord makes a way to the tenant because because, you know, that I do believe that most tenants don't know the fact that landlords are geared in terms of their investment. They borrow money from the banks. They paying a bond every month. And when they don't get rent, they need to find a place to somewhere to pay that bond. And we know that there's a lot of conversations with the banks themselves, the banks themselves have reduced their fees. They have also created payment holidays, and they've assisted landlords ultimately. And like you said earlier, the prime rate has dropped. So the repayments are fall follow a far more affordable. And so that gap that that, you know, assistance that the landlord get is usually what the landlord is able to afford to pass back to the tenant. Right. The tenant generally doesn't know those facts. And that is why that communication is so critical. And it really is so crucial. We emphasize it on episode one when we're having that conversation with Zach that being proactive, whether you're a tenant yourself or a landlord, being proactive with the other party, particularly during this crisis. And if you're already affected in terms of your income, or you're ready to see that perhaps your income might be affected, you really do need to take a proactive stance. We're going to go for a quick break. And after this, we'll be taking questions and comments from our viewers at home. Of course, you've got if you've got any questions or comments on this topic on how COVID-19 has affected tenants do share with us, whether you're a landlord yourself, and it has affected the income that you receive from your tenants or your tenant, and you haven't been able to pay your full rental payment or even pay at all, do share those views with us just below. We'll be back just after this. Welcome back to episode 29 of the Private Property Podcast. I'm your host, Zaman Donga. Come on, I'm joined this evening by Gil Sperling, who's the CEO of Flow. We're talking about how COVID-19 has affected tenants. And of course, going through those flow findings, which is a survey that Flow conducted with their 80,000 rents and whether 80,000 rather tenants that they've got, you can already see Gil, that I'm thinking of money. I mean, if the report gets cut, the first thing I'm thinking about is money. Now, you know, as I was saying earlier that Flow has 80,000 tenants on their platform in the conducted survey to really look at how COVID-19 has affected both the rents and the landlords. Now, Gil, before the break, we did say that we're going to be taking in a few questions and comments from viewers at home before looking at some of the other insights that the report provided. We've got one here from Bruno Sanchez, one of our regular views at home, who says it's difficult for all of us. The more the repo rate drops, the better for us. And not so good for the lenders though. And I think it's that sentiment that we're saying, I mean, the repo rate is getting cut really does ease things slightly for landlords. And if anything, it is that great opportunity to be able to have that conversation with your tenants because you're really at least getting a bit of comfort from the Reserve Bank. We've got another this time around a question from Numbulello, Vulan, who asked have been dying to find out if a tenant is obliged to pay rental for the period of lockdown. Yeah, I mean, that's that's a good question. You know, the the tenant is under a lease agreement with the landlord. So strictly, there is a legal agreement that basically says you're staying in my place, you need to pay for it. So that legal agreement still stands and it's actually down to coming to a re negotiation with the landlord at this time. I think without that renegotiation, one defers to the legal agreement. Yeah, so I mean, one of the things that certainly comes out in the latter part of this report is, I mean, one of the things I think that came out is that you looked at, for example, how landlords can ensure that they're able to come out of this, you know, post lockdown. Perhaps if you can share with us how landlords and tenants I can ensure that they're able to come out of this, you know, types and perhaps some of the service sentiments from tenants in terms of how their landlord are providing service for them. Yeah, so one of the things that we've asked them was essentially running an NPS score, which is quite a standard tool to gauge sentiment and level of service. I mean, you may have even seen that when, you know, after you've come off a call center, it asks you to rate one to ten. A lot is able to be told out of that. And we asked the tenants what it was to rate their landlord and the relationship with the landlord pre-COVID-19 and to rate it now. And there was a remarkable difference. So first of all, the average sentiment is average. You know, so this is pre-COVID-19. It's very average and just below average. Already there was a strange relationship between landlord and tenant. And again, that's like a pure average, right? So they're obviously pockets of good and bad relationships. But that number reduced by 16 percent through COVID-19. Now, where does one attribute that's why? So, you know, generally there's negativity. You know, people are fearful and people are also losing their income and it hurts. And so there's generally negativity. And a lot of the conversations with the landlord are not what tenants may want to hear. So that there's several reasons for it and something that landlords generally need to be aware of that. Relationships as much as they were potentially strained before are even more strained and it's risk for the landlord, right? So the landlord, the biggest expense for a landlord, the biggest cost and the biggest hits to a landlord's return on their investment is vacancy. And so if their tenant churns, if the tenant leaves, the cost of acquiring a new tenant is far higher than the cost of retaining a tenant. And that's really one of the insights here that we saw. So our base has a bunch of tenants who are connected to landlords who are ultimately our clients and those that are on board without the landlord connected. And we split this result by that, right? So we asked a similar question. Well, if you're using flow to engage with your landlord and if you're not, is that sentiment difference? And it's also remarkably different, right? And it's generally because what flow really represents is the goodwill. So tenants get rewarded on flow for good positive activity. And that's where you get that affirmation, right? So even for paying your rent on time, you get a little reward. And yes, our rewards potentially can help in affordability. But the more powerful part about it is the fact that the affirmation and the thank you for paying your rent means goodwill means loyalty. Loyalty means your tenant is going to stay, right? So whether it's flow, whether it's anything, the insight here is that landlords have an opportunity now more than ever to form a strong relationship with their tenant who are in strain and in dire need. And a goodwill goes a long way. That's really what we found. And it is a tool that we think landlords should use going forward. And you know, I think what a lot of landlords, especially in concentrated areas, probably lack your insertion parts of housing, maybe even certain parts of your Durban area, maybe not so much in Cape Town. So certainly markets where you find a lot of overstock properties or there's a lot of stock on the market, you tend to find that consumers are going to be able to have their fair pick of where to go and live. So there's quite an oversupply and a lot of landlords have actually bought maybe more than they can potentially handle. And so the fact that we're going to see an oversupply, I know already seeing it certainly means that tenants are not going to be as pressed in terms of trying to find the ideal place. So even that sentiment of rating your landlord is such an important one because oftentimes we're able to go, you know, do due diligence on a tenant, see how much they can afford, you know, look at their credit score, look through their bank statements and really get a financial sentiment around them. But oftentimes the same isn't done in reverse. I mean, a lot of landlords sometimes our properties perhaps might be managed by agents so you're not doing it directly. So you typically don't get to really be scored by your tenants and perhaps that's slowly where the market might even go. Where tenants are also able to shop for an ideal landlord where even as tenants perhaps we're even able to recommend good landlords to say, look, I stayed at this place for the past three years and I'm now moving. If there's anybody who'd be interested, this landlord is fantastic. I haven't had any issues in the three years that I've stayed. So it really does also call on landlords to not just look at their property investment or the property that they rent out as just that, you know, admin intensive thing and somebody must just pay and nobody must handle it, but really begin to build a relationship with your particular tenants. What did you say, Bill? Yeah, absolutely. I mean, first of all, completely agree that there's formal supply out there than there is demand and that's applies increasing. I mean, what COVID-19 did to the travel industry is also quite devastating. And so Airbnb in South Africa is 50,000 units or so. That's all now going to flood the markets as long-term rentals. So those landlords have to divert their stock to long-term rentals. Never mind the oversupply that existed before, especially in Hanting. So it is a tenant's market and they probably are able to choose. And that is where landlords who have a strained relationship with their tenants are at risk, 100%. So those tenants who, those landlords that, you know, are offering the goodwill are protecting themselves. So the value of that goodwill is you cannot correlate that to the value of the retention or the potential loss of a tenant. And that's where just a perceived value of a gift or a perceived value of affirmation goes in such a long way. And I think the last point that I wanted to make on that is that really where our strength is at flow and what we try to provide as data here is the behavioral economics component of it. And you're thinking around having that trust engine come through where people can make a decision because of transparency of what this landlord is about, what this tenant is about. Landlords should be considering as a tool, more now than ever, to consider their tenants, not as a transaction, but as a customer, as a client and someone that they need a long-term relationship for. And there's a lot of tools and a lot of PropTech generally is providing these platforms to create the transparency and communication where landlords should look at it as an opportunity more than anything. And I couldn't agree with you more, Gail. I think that one of the things that I certainly did following, you know, some of the conversations that I've had right in the podcast is proactively approach, you know, some of my tenants, actually approach all of my tenants and some of them say, you know, check in on them. Have they been affected? And even those who weren't affected by this crisis already offer a discount. And so, you know what, given that we don't even know how long this is going to last, perhaps right now you may not be affected. This might go a long way in terms of covering other aspects of whatever demand that you might have in your life, perhaps even supporting other people. I think it was that sentiment, even from their end, that they just simply did not expect. I think landlords don't typically say, I'm going to give you, whether it's a 5% or a 10% discounting rental for the next three months and you don't need to pay it back. We don't need to enter into a new agreement. It's for this period. You can use it as you please. So for the next three months, you pay your rental less that amount. Really did go a long way. You did find that those tenants appreciated it. They certainly didn't expect it. And some of them even said that they've paid for it, that right now they're currently fine in terms of their finances, but they're going to pay that for it. So I think that kind of sentiment really does have a ripple effect. You might just be doing it to a tenant to maintain that good relationship. One of the things that we've certainly emphasized is that having a good tenant is such a difficult thing and you really want to retain the good tenants and take care of them, particularly during this crisis and find different ways that you can weather this particular pandemic storm with your tenant. Before I let you go, a lot of us know that it's quite unclear when lockdown is going to end completely. I mean, we're all kind of waiting for next week and looking to see if we're going to finally go down to level three and what that level three is even going to mean. I mean, we'll look at what your government presents. What does a prolonged lockdown essentially mean for both the landlord and the tenant? And I mean, different sentiments have come on when it comes to lockdown. We're looking at September or October. So there certainly is a sense that we're still going to be in this probably for another three months. So we're not going to be fully open. More jobs continue to be shared. So what does a prolonged lockdown essentially mean for both parties? Yeah, I think that it makes things very difficult. The landlord has generally comes in and does inspections and has to run his admin side of it. And he's also locked down in his home. Even the institutions, they are working from home. So in terms of the landlord's operation, that's difficult. And it's, again, I think one of the main points that we made to this half an hour was that landlord and tenants may be stuck together for a bit and you should rather be stuck then having a good relationship. And I think that's really what one should expect. You may get stuck, get it right now, communicate, offer the goodwill, offer the transparency. And I think that's where they can support each other through this. Now, Gil, for viewers at home who might want to, you know, look at these findings, where can they go to access what the survey essentially revealed? Yeah, it's freely available. Just hop on to findings.flow.rent. And you can download it there. We also ran a webinar with some of the big players in the property industry who are commenting on it. And they also offer very, very interesting perspectives. You can watch that there and you can download these reports at findings.flow.rent. Thank you so much, Gil. That is Gil Sperling, the CEO of Flow. Of course, we're talking about how COVID-19 has affected both tenants and landlords. And this is a topic that we're going to continue covering because I think both parties are heavily affected and we're all trying to find different solutions to help us navigate these uncharted territories and really find solutions that work for both to make sure that tenants are still able to live where they live and don't need to unnecessarily move. But really does take both parties, communicating and being proactive in trying to create a great relationship and making sure that we're really able to do work this path together and make it at the end. Gil, thank you very much for joining us. I'm sure we'll be in touch very soon again. I know that you probably want to be able to do these maybe on a quarterly basis. So I think the next time we find another survey out we'll definitely invite you and see what those findings are. That's been, of course, another great episode. Episode 29 of the Private Property Podcast. I've been your host, Zamaat Doong. We'll come back again tomorrow evening until then stay home and stay safe. Hi, I'm Alan Footman. I'm a sports tour operator from Cape Town. My family and I have been living in the Southern suburbs for 21 years. What we love about the neighbourhood is it's very family orientated. Kids to do, spend where we are next to the farm dog and enjoy the fresh air. In the southern side of the town and on top of that we have the University of Cape Town one of the most famous universities in the world. Newlands is a great suburb. All the sporting amenities, Newlands, rugby ground, cricket ground, etc. Down the road to Claremont, lots of shopping centres for the kids and for the mothers to do their shopping. Fantastic pubs and restaurants around like Forreys, Springbok Bar. Visuals Court is full of beautiful upmarket homes. Kirstenbosch Gardens, National Botanical Gardens right next door. What attracted us to Constantia is it's a large open spaces. I've always wanted to be a farmer and now I'm living next to Pro-Constantial Wine Estate, the oldest wine farm in the country where you have fantastic wines, great restaurants, got the best of both worlds. My family and I have loved every moment of living in Constantia. We couldn't be happier and this is our neighbourhood. I'm Rick Nettling, I'm a Olympic gold medalist and shareholder and marketing director of Alderview Estate, which recently acquired Pro-Valley Estate. I've been living in the beautiful Paul Frontrick Valley for the last five years. We are saturated right in the heart of the Cape Wine Land. Security is our number one priority and it's something we work on every day. This has earned us the reputation of being the safest estate in Africa. The lifestyle that this area has to offer truly is country living at its best. We're just five minutes away from the historic town of Pearl. Pearl really is an incredible area to explore with little gems like the spice root and Fairview farms. But the biggest attraction is the excellent schools. Frontrick on the other hand is a major international tourist destination and also known as the culinary capital of South Africa with a diverse offering for every palette and occasion. Our recent acquisition of Pearl Valley is a major game changer for us. Our residents can now enjoy a wide range of amenities unmatched anywhere else in the world. There's the world famous Jack Nick the Signature Golf Course which is consistently ranked among the top golf courses in South Africa and there are some beautiful properties on the course. Folder V really is the ideal family environment. We also cater to equestrian lovers with facilities on offer for every discipline from the two hurling and standard polar fields to our state of the art the question centers and miles of trails. Our horses live in Paradise too. Folder V has its own wine farm and sellers producing award-winning wines which every resident can be proud of. I've been blessed to travel the world but this is the place I come home to. I'm sure you can see why we call it the Valley of Life and this is my neighborhood.