Experienced property investor and REB director Alex Whitlock believes the property manager is the one professional who builds a long-term relationship with the investor but their true value has not been recognised.
As someone who has been a property investor for 30 years, Whitlock has observed recurring patterns with every property he has ever bought. The broker arranges the loan and disappears. The sales agent collects their commission and disappears. The conveyancer completes the settlement and disappears.
But there is one professional who joins the property investor in their journey, builds a relationship with them, and remains with them for an indefinite period – that is the property manager (PM).
In REB’s The Property Management Excellence (PMX) Podcast, Whitlock – who is also the co-founder of Managed – argued that most of the real estate industry has not understood how valuable this relationship is.
Speaking from the position of an owner, Whitlock said: “I think anyone who doesn’t use a PM, even if the property is three doors down, is crazy.”
He argued that property management is the most valuable component in the property investment chain, but it is often an afterthought or treated like an extension of the sales business in an agency.
Whitlock’s frustrations stem from the fact that while every other professional in the property investment process is transactional by design, the property manager is the only one whose value compounds with time.
This is because they are in continuous contact with the owner. They know the property’s rent history, its maintenance pattern, and its tenant cycle. They are primed, according to Whitlock, to help the investor make a decision about the asset on any given day.
And yet most PMs treat that ongoing relationship as administrative overhead rather than the strategic position it is.
“Working hard and being effective at what you do are two really very different things,” Whitlock argued.
“You can’t expect investors to understand and value the work that PMs do. There is a conceptual gap between feeling sorry for yourself because you do a hard day’s work, and actually understanding how to translate that as a service proposition a customer would value.”
No one in the industry is willing to admit that this translation issue exists, in Whitlock’s view. The owner sees a monthly statement through software that was not built to communicate with them. They see a maintenance request that lands as a demand for cash with no context. They see a fee that is positioned as a cost rather than as the price of an ongoing professional relationship. None of this is what the PM intends to communicate. But it is the message owners receive.
The structural issues hindering PMs
Whitlock said he believes the reason for these issues is structural. Most property management businesses were not built by property managers. They were built by sales agents who understood the annuity value of a rent roll but had no particular interest in the daily operations of the PM department. That positions the property manager as an irritant rather than a partner.
He emphasised that he has personally and repeatedly seen this attitude.
“I’ve got a friend who’s a very, very successful sales agent, now has his own agency,” Whitlock said.
“But he doesn’t understand property management. He conceptually knows the value of building a rent roll, but he doesn’t understand it.”
The consequences of this approach could be detrimental to an agency because it could be left with a property management business that is staffed by whoever is available. These PMs would have to navigate business operations without strategic direction or training, and as such, deliver flat results.
Whitlock added that it is these structural issues that prevent most legacy agencies from growing their rent rolls, rather than market conditions, pricing, or technology budgets.
The outsiders shaking up the industry
Whitlock went on to observe an interesting development in property management. He said the real estate professionals who are transitioning to property management from outside the traditional industry (such as mortgage brokers, buyer’s agents, accountants, and entrepreneurs) see the position more clearly than most legacy operators do.
They arrive without the mentality of someone who is a sales agent turned principal. They look at the relationship between PM and owner with fresh eyes and see the basis of an entire business model.
As such, they will be the ones consolidating market share over the next decade, because they are building businesses around the value of the seat rather than around the cost of staffing it, he flagged.
Whitlock concluded with a simple but powerful pitch to property managers.
“The investor needs you. They are alone after the settlement except for you. The opportunity is there if you take the position seriously – and the cost of not taking it seriously is that someone else will, and they will be the ones with the rent roll in five years,” he said.
Managed was built to help next-generation agencies win market share fast. It is the only comprehensive property management platform that exclusively delivers secure, instant, and automated direct payments from tenant to landlord, eradicating the need for a trust account.
If you’d like to find out how Managed can help power your growth, call Conor on 0452 298 394 or book a discovery call today.