Immediately Make a Profit and Enter the Fintech Business, Rukita has the ambition to lead the boarding house market in Indonesia

Property prices continue to soar making it difficult to sell. According to Indonesia Property Watch (IPW), this condition causes people to prefer renting over buying, especially in big cities.

According to the IPW survey in 2020, young people in big cities prefer to rent rather than buy property. As many as 47,4% of respondents chose to live in boarding houses, then 47,1% chose apartments, and the rest chose to live in family or relatives' residences. With an average income of Rp. 6 million-Rp. 7 million per month for young people, they can only afford to buy property in installments of Rp. 2 million-Rp. 2,5 million per month or for Rp. 200 million-Rp. 300 million.

“With this price range, it is difficult for them to get property in Jakarta. That's why millennials prefer to rent apartments or boarding houses," said IPW Executive Director Ali Tranhanda as quoted from News One.

Furthermore, based on research, 39,9% of the younger generation live in boarding houses or apartments with rents below IDR 2 million per month. Then, as many as 38,5% rent for IDR 2 million-IDR 3 million and 21,6% rent for more than IDR 3 million.

The conditions above do not take into consideration what the quality of boarding houses currently operating is like and its relationship from the supply side demand. Rukita as one proptech seeks to resolve this issue with a technological approach. Rukita positioned itself as a long-term residential rental provider platform.

"In this case there is a problem because most boarding houses are not regulated, usually those in good locations are not yet regulated.manage well. "That's why we are here to provide innovative solutions, improving the quality of life for Indonesians with a place to live that is clean, safe, and doesn't have to be expensive," said Co-founder and COO Rukita Sarah Soewatdy in a joint interview. DailySocial.id.

The solutions offered by Rukita are basically motivated by issues in the industry, so from upstream to downstream. The products are: Infokost, RuOptions, Rukita, and RuManage. Infokost has been known as a boarding house search site since 2011. This startup was acquired by Rukita in March 2022.

Meanwhile, RuOptions addresses comprehensive marketing solutions for property owners looking to optimize their revenue and occupancy; RuManage makes it easier for property owners to manage all boarding house units, including checking details about remaining and occupied units and rooms, monthly reports, and all information about each room and tenant.

Lastly, the Rukita application is a platform for end-user who want to rent a boarding house that is equipped with a number of features. For example, explore boarding houses virtually, book room, history booking boarding house, pay boarding house rent, and on-demand service.

Sarah explained that her party works closely with boarding house property owners and helps convert the property into a rental unit, from renovation to operating it as a business co-living promising.

"We work with owners of boarding houses, shophouses or empty land, who want to have a boarding house business, or already have one but want to maximize their income. We are partners to take care of A to Z, from renovation, design, sales, to our billing. The owner just sits back and relaxes.”

The average price for a boarding house operated by Rukita is between IDR 2 million to IDR 3 million per month. The distribution starts from Jabodetabek, Bandung, Yogyakarta, Medan, Bali, Semarang, Palembang, Surabaya, Bali and Malang. The total number of rooms operated reaches more than 1 million active rooms, in partnership with 300 property owners.

Reach the profit point

According to him, management business co-living more prospective and has a clear direction of profitability. There is a clear division of profits between Rukita and the property owner. Also from the consumer side, there is no strategy to burn money too much because they see that there is a high need for comfortable accommodation in big cities.

This condition is inversely proportional to business co-working space which can be said to be heavier because it has a different function than co-living. It's like, even though the office implements a work from home policy, employees can still work anywhere without having to come to the office co-working space.

As a result, Rukita's position as a company proptech more stable. Sarah is confident in ensuring that Rukita will reach a profit point at the end of this year within three years of its founding. He said, the pandemic has proven that every company must have a good business model with a clear direction for profitability.

“We are paying close attention economic units, all decision what we take must be responsible. Nowadays, it is no longer the time to burn money, everything must be done responsibly. We will profitable end of this year because business core we've been very sustain and can stand without having to be supported fundraising. "

However, that doesn't mean Rukita isn't looking for the next fundraiser. Sarah said this plan would start next year with a focus on growing the business fintech RuFinance. This newest business unit is part of the company's next ambition which wants to encourage new boarding house entrepreneurs, but is having difficulty getting started.

RuFinance

The company started the steps to initiate RuFinance recently by formalizing a collaboration with Bank OCBC NISP. In this agreement, Bank OCBC NISP will provide credit of IDR 724 billion so that young entrepreneurs have easy access to funding to start a business co-living as an alternative source of passive income, including steps to expand Rukita's network which is targeted to expand to eastern Indonesia.

It is claimed that the financing scheme in this program is flexible and can be controlled because the customer's current account balance will be taken into account, so that the credit period can be shorter than initially planned. For this reason, the greater the current account balance, the automatically reduces the installment burden and loan interest.

Interested entrepreneurs will be verified by the Rukita team and Bank OCBC NISP whether they are eligible for a loan. If they pass verification, they can immediately sign a loan contract with the bank and a management contract with Rukita.

After that, users can complete the buying and selling administration process up to the credit agreement. Next, Rukita will prepare the building for rental, manage its operations, and users can divert their income to pay installments.

This innovation, continued Sarah, is the company's next focus which has not been unaffected by the impact of the pandemic since 2020. Initially Rukita's target consumers were students, as a result at the start of the pandemic there was a decline in occupancy because they returned to their homes and teaching and learning activities were carried out virtually.

Companies are starting to change their targets to young workers, which has proven successful in increasing average occupancy by 90% from when the pandemic reached 70%. "We have product-market-fit which is good because even though it is a pandemic, our solutions are still needed by the community, that's why we can do it sustain good occupancy.”

According to Sarah, there has been no significant change from being a student to being a worker. Because their needs are more or less the same, comfort, cleanliness, a strong internet network, and available cleaning services. Even though the majority of workers receive relief to work from home, they still want a temporary place to live so they can focus on work.

From within Rukita, adjustments to the way of working were also implemented during the pandemic for teams that could work from home and still had to be in the field. For example, holding weekly meetings between divisions to solve a problem together.

"Lesson learnedthe thing is that we have to adapt quickly, resilient, our team adapts from offline to online and vice versa, all of us decides well so that all teams can work smoothly and quickly.”

Since Rukita's top ranks are led by women, Sarah also encourages her employees, regardless of gender and race, to become leaders and innovate. As of September 2022, the Rukita team numbered more than 313 people with a percentage of 43,5% women and 56,5% men. "We do not limit anyone who has good potential to be fully supported because anyone can become it leader, " he concluded.