Business

Quinto Andar: rent renegotiations generated more than BRL 15 million in savings for tenants in Brazil

Head of Communications of the Brazilian unicorn, José Osse, said in an interview with LABS that COVID-19 is already changing housing preferences

Ipanema neighborhood, in Rio de Janeiro.
Ipanema neighborhood, in Rio de Janeiro. Quinto Andar already perceives a greater search for houses in the city. Photo: Piotr Piatrouski/Shutterstock
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Since March, when social isolation measures began to gain ground in the country’s largest cities as a way to prevent the spread of the new coronavirus, most Brazilians have also seen their income collapse. A survey by the National Confederation of Industry (CNI) released in May found that 40% of Brazilians reported a partial or total loss of income. A month later, another survey, from DMCard, in June, showed that this number may be even higher, 70%. It is in this context that the Brazilian real estate unicorn Quinto Andar saw the renegotiation of contracts between owners and tenants generate more than BRL 15 million in savings for tenants.

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Operating in 29 cities, including large capitals such as São Paulo, Rio de Janeiro, and Belo Horizonte, Quinto Andar says that this amount involves negotiations that resulted in rent discounts of 5% to 90%, or even in the payment of the monthly obligation in installments, for an average term of 2.7 months. The startup launched this Wednesday a webpage (in Portuguese) with open data on these negotiations.

In addition, other services offered by the startup were also widely deployed by property owners, resulting in more than BRl 19 million in transactions in these three months of the pandemic. This is the case of the guaranteed payment, which covers the rent in case of delay by the tenant, and the anticipation of the rent for the subsequent month, an option that began to be tested in February.

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“On March 13, a week before the official quarantine in São Paulo (the company’s headquarters), we started to assess how the pandemic would impact us, our partners, owners, and tenants. We created a specific flow for these negotiations and we warned everyone about this possibility “, José Osse, the startup’s Head of Communications to LABS.

José Osse, QuintoAndar's head of Communication.
José Osse, QuintoAndar’s head of Communications. Photo: QuintoAndar/Courtesy

He points out that the vast majority of owners within the platform are people who have only one or two properties and, therefore, depend on the rent to maintain their own income level. The startup does not reveal how many owners use Quinto Andar’s services, but on the company’s website it’s possible to see that the city of São Paulo alone has more than 3,000 properties available for rental through he platform.

In addition to initiatives aimed at owners and tenants, the company launched, in May, a credit line for brokers, photographers and real estate partners that allows them to anticipate up to 70% of their monthly earnings, based on the average of commissions and services obtained between January and February this year. Of the BRL 4.5 million available in this credit line, more than BRL 1 million has already been used. The amount came from the company’s own budget, which realized the importance of maintaining its ecosystem standing as a fundamental strategy to maintain itself in this period of crisis.

Brazilians start looking for more houses, and even options in the countryside

In an interview with LABS, Osse said that the pandemic is already starting to influence the behavior of the Brazilian real estate market. “We are collecting data on this at the moment, so it is difficult to make comparisons. But in capitals like Rio de Janeiro, we noticed an increase in the search for houses, in neighborhoods furthest from the city center. We also saw that, in large urban centers, people also started to look for options in the countryside. We believe that this has to do with the search for more space, even for this new reality of remote work, and for more tranquility,” says Osse.

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The 1,000 employees of the startup will stay at home office until December and, from 2021, will have remote work as a definite option within the company. The expansion plans, both for other cities in Brazil and for Latin America, are currently stalled. In April, the company, which closed 2019 with BRL 28.9 billion in assets under its management, had to lay off 8% of its staff, as a way of maintaining its operations.