This is how the 'Rent Now, Pay Later' scheme works - sign or renew a tenancy contract. Tap Keyper for the sum, which is then paid out to the landlord in advance. The tenant pays back in up to 12 months. Image Credit: Shutterstock

Dubai: Having difficulty paying the rent? Then, solutions are at hand as lenders start extending ‘pay later’ funding to help Dubai residents meet their rent obligations.

Keyper, a digital real estate investment management platform, is offering rent-specific funding support for up to 12 months. The launch is scheduled for July.

The rental commitment is typically paid off to the landlord by Keyper, as a single payment or spread over 3-4 cheques, and then the tenant pays back in monthly instalments.

The ‘rent now, pay later’ model is an extension of the bigger ‘buy now pay later’ (or BNPL) financing that had taken off in the UAE with consumers looking to buy mid-sized purchases. These BNPL programs come at 0 per cent interest and need to be paid off in 4-6 months.

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Easier to pay rent digitally

Dubai Land Department recently made it possible for rental commitments to be paid to landlords through online banking/payment channels, doing away with the need to collect cheques. For the tenant, it also means that they do not have to ensure enough funds are available in their accounts in advance.

But with rents rising by 20 per cent on average in Dubai’s heavy-demand residential districts, meeting the rent requirements have become tougher for many. Especially for those hit with steep spikes at the time of renewals.

“Keyper allows tenants that are starting a new tenancy or renewing their current lease to pay their rent in 12 payments,” said Walid Shihabi, co-founder and CSO of Keyper.

Our goal is to allow tenants to more easily manage their cashflow when renting in Dubai, as today, most tenants are expected to pay 3-to-12 months in advance. While we will look at each tenancy on a case-by-case basis, we will focus on offering our services to tenants that stay within a healthy ratio of rent cost to monthly income.

- Walid Shihabi of Keyper

Landlords paid in advance

The Keyper funding also integrates an ‘upfront rent’ product for landlords. The platform pays the whole year's rent in one go to the landlord right at the beginning of the tenancy contract.

“If the landlord does not take our upfront rent offer or is not already receiving 1 payment, we pay on the agreed upon terms,” said Shihabi. Say, on a four- payments tenancy, we would make four transfers to the landlords account on the agreed upon dates.”

Traditional check payments are outdated, prone to errors, and do not provide a good user experience for tenants or landlords. We designed our RNPL service to address these pain points and to enable customers, tenants and landlords, to better manage their finance with ease

- Omar Abu Innab, co-founder & CEO of Keyper

It helps when paid monthly

“Landlords that offer monthly check options are a great fit for our upfront rent product, in which we offer them the whole year's rent upfront in one payment and we then collect the payments from the tenant,” he added.

Landlord’s consent

“Our RNPL is available for all tenants and landlords in Dubai. However, if a tenant signs up for RNPL, we need the landlord's consent to offer it to their tenant. As long as we have the landlord's legal approval, we can offer it to anyone in Dubai.

"Our research showed 98 per cent of Dubai tenants don't pay their rent monthly, with 60 per cent paying 3 months in advance (through four payments). We believe while most tenants would be keen on paying their rent monthly to better manage their cashflows, though that option is rarely available in the market. A solution like RNPL is then needed to bridge the gap between tenants and landlords."

Evolution of BNPL
"While BNPL had its start and initial success on retail purchases, it focuses on discretionary spending and has not yet tackled household largest expenses, like rent. We believe rent is just the beginning of non-discretionary spending moving to more flexible payment terms, especially when in MENA, many of these, like rent, school fees, and healthcare, are setup so the consumer is, many times, force to pay months in advance..."

- Walid Shihabi, co-founder and CSO of Keyper