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It all started in 2016, when his parents’ tenants caused R30 000 damage and disappeared without a trace. Ross Fitzcharles was asked to help. Now his company, Preferental, manages about 1 400 properties, with a portfolio worth over R1 billion and clients in seven countries.
It’s backed by Capitec and Imvelo Ventures, and Property24 is a shareholder. And none of Ross’s clients will ever suffer the same fate. Not bad for someone who once ran a boerewors stand for pocket money! Ross generously shares his success story and advice for other founders.
I’ve always been an entrepreneur. When I was younger, my dad encouraged me to put lawn in for his clients where they were doing big excavation work. Later, at varsity, I had a boerewors stand at Pick n Pay on the weekends. I was thinking of maybe starting an ice business, selling and distributing, but while I was studying, I could never really get it going.
I’ve always carried a small notebook with me to write down ideas (inspired by Richard Branson). I remember wondering what it would feel like to have an “Aha!” moment on a business idea.
After I finished my honours in risk management at Potch, I got an opportunity at Momentum. I worked my way up from the back office in a unit-trust pricing specialist role to the front office, and then directly under the COO. About a year later, I got an opportunity to go to Deloitte Consulting to focus on strategy and innovation in the insurance and investment space. I did pretty cool projects there, but it was during that time that my folks said, “Hey, we’ve got a problem with our tenants.”
I couldn’t find a platform that had insurance embedded specifically for property management. I asked my director for a six-month sabbatical, got an angel investor to back us, found a developer, and that’s how the journey started.
When I was doing the research on what eventually became the Preferental platform, I realised: this is my “Aha!” moment.
The biggest challenge in starting the business was probably building credibility in the market. It was such a new concept: a digital platform that manages your properties and takes away the risks. Landlords would say, “This is amazing. What’s the catch?” We had to strategically build confidence with customers. We did a couple of studies and spoke to some mentors. We started marketing the (big name) service providers we used as partners. We never formally got confirmation or contracted with them; we just figured, if we ever get in trouble, we’ll deal with it!
Small moves like that started creating confidence. Our online presence was also a challenge. Remember, this was pre-COVID. People weren’t going online or even doing Zoom calls. So COVID changed a lot of that. Close to the end of COVID, we suddenly had a massive influx of clients joining. The risk product was amazing for them.
We’ve just built a white-label solution for Property24. It’s the first AI-screening solution for tenants. We can tell if the bank statement has been tampered with, and do real-time checks with SARS. So, everything you usually have to do as a landlord is done for you, except a call to the previous reference. (And we’re working on AI to do that as well…)
Once the tenant clicks ‘Submit’, you can immediately see the entire risk profile. Property24 looked at it and said, “We want that!” So we’ve got big dreams with them. They process about six million payments through their platform monthly.
We’ve also launched an offering so tenants can pay the deposit off over 10 months. The landlord is guaranteed the full deposit from day one, and we protect the balance of the lease agreement against debt, disability, and retrenchment. Tenants can remain in the property for the duration of the lease, and the landlord gets their rental paid by the product. I believe we’re going to get some massive growth there.
We built the Preferental system so that we can white-label it with a partner programme. So partners in the industry with a property distribution network can invite their brokers and earn revenue from each sign-up.
Consistency. Having focus is important, making big calls is important, but if you’re consistent with something, then that gets you closer to your dream and ultimate vision.
In 2022 we did a lot of PR on our business, on live news and radio stations, for a month. That carried us through six or seven months’ worth of movement in the market. Then one of our competitors phoned us and told us they weren’t going to make it through COVID, so they promoted our service as they closed down their business. (Their staff were merged into a different division of the company.) They just wanted to find a safe haven for the clients.
This deal with Property24 is the biggest thing we’ve built that is scalable, integrated with AI, and backed by a big corporate.
I’m a Christian. It’s always been the Lord opening up doors and bringing opportunities. Sometimes I have this feeling that this isn’t the right partner. And I follow that intuition. Today, we’re sitting here with some big hitters backing us, and I couldn’t say that strategically, I’ve done this to achieve that. It’s just happened. Everything also boils down to being consistent in what you do.
Hire a great CTO (chief technical officer) from the get-go. We saw massive changes when we got the right CTO who could dream with us and build products with us.
You always hear this, but it’s tough being an entrepreneur. You don’t know how tough it is until you actually start doing it. But I’m privileged: I had access to some big names in terms of mentors. If I’m confused about something, I jump on a call, have a coffee, and talk to them. There’s so much clarity coming through that.
So, if you’re starting a business, reach out to people. You’d be surprised how open they are to helping and giving back.
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