The property management shake-up has already started

Tarrant said that while payment technology systems have made significant progress across several sectors, the property management sector has lagged behind.

“Property management has been left behind; it’s literally 10–15 years behind other industries, and it is mind-boggling,” Tarrant said.

He said the lag was partially due to the sector’s resistance to change, as many property managers were set in their ways, particularly when it came to shifts in their processes.

“There has been an incumbency of how real estate rental transactions have taken place through trust accounts over many years,” he said.

“Change is difficult, and it doesn’t happen overnight.”

Despite being change-resistant, Jeyasothy said that agencies were beginning to see flaws in their current processes and were looking to optimise their systems for themselves and their clients.

“I think a big part of it is accepting that there is something wrong in the current industry and the current process in how they follow it, especially with trust accounting,” she said.

“A lot of next-gen agencies understand that and want to give a better solution to not just themselves, but their ecosystem as well.”

As a protective tool

With recent changes to governance and compliance in trust accounting, Tarrant said businesses could leverage new technologies to ensure they complied with established rules and regulations.

“If I were a large aggregated trust account, I would be quite concerned about compliance,” he said.

“Technology has great utility in that you tell it what to do, and it behaves, but when you start throwing humans into the mix, that’s where behaviour starts getting compromised.”

Jeyasothy said property managers should consider moving to a no-trust-account platform not only to streamline their processes but also to enhance their security.

She said that by connecting the tenant’s wallet directly to their lease, the funds could not be accessed by anyone other than the intended recipient, even the property manager.

“If a tenant puts money into their wallet, the tenant is the only one who can access it,” Jeyasothy said.

While paying for a no-trust accounting system would often incur a small cost for investors or agencies, Tarrant said most would be willing to pay it for the additional peace of mind.

“There are costs connected with the movement of money, particularly if it is secure,” he said.

The agency benefits

Tarrant said new tech avenues provided the industry with an opportunity to understand how automation could benefit not just landlords and tenants, but property managers themselves.

He said automation could help retain more property managers in the industry, giving them more time to serve as advisors to landlords and avoid burnout.

“Why would you choose property management as a career when you have this archaic way in which it is done?” he said.

“You can see why people burn through the industry so quickly and leave it on the other side and go and find something else.”

Just as an accountant assists clients with their finances, Tarrant said choosing the right property manager is pivotal to maximising the value of an investment property.

“If all you do is arrange quotes, do repairs and maintenance, you’re going to be disrupted, and disrupted rapidly,”

“There are some really uncomfortable truths there for property managers,” Tarrant concluded.

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