REB director Alex Whitlock recently discovered, to his shock, how easy it is for investors to switch property managers. He warns that agencies don’t realise how detrimental this is to their business.
Whitlock – who co-founded property management and automated rental payments platform Managed – has been a property investor for 30 years, and recently experienced something profound and disturbing when he decided to switch his property manager (PM).
While he expected forms, transition periods, awkward handover conversations, and possibly a fee dispute, what he got was an email.
Whitlock has bought and sold properties, refinanced loans, worked through tenant changes, and dealt with maintenance issues at every scale. The one thing he had not done until recently was switch a property manager. While he expected friction, he was met with a quick and easy transition process.
He said the discovery stayed with him, not just because it was easier than he had assumed, but because of what it tells him about the property management industry.
“I never switched PMs before,” Whitlock said in an episode of The Property Management Excellence (PMX) Podcast.
“I went to one of the agents, and they went, ‘you just need an email’. It’s literally an email to the agency, and it’s like a management takeover. That’s the end of it. And the agencies were incredibly cooperative with each other.”
As an owner, Whitlock found out how little stood between him and a different provider. As someone who thinks about the property management business commercially, he found out something more useful: the barrier to leaving is essentially nothing, and most agencies appear not to have grasped the consequences of this for how they hold and grow a rent roll.
Nothing stands between PMs and losing owners
His view is that retention in property management is not a passive condition. It is the cumulative result of a thousand small interactions that either earn the next month of business or lose it.
There are no contractual moats, administrative friction, structural costs, or other barriers to a property investor switching to a PM’s competitor. The owner who decides to leave can be on the books of a competitor by the end of the day.
That changes the nature of every conversation a property manager has with their owner. According to Whitlock, the owner who hears from their PM only when something has gone wrong, like a maintenance issue, an arrears call, or a lease expiry, has no reason not to switch when a competitor calls with a more proactive proposition.
The relationship has to be earned continuously. A property manager cannot be complacent that the owner will be loyal to them for an indefinite period. Owners are constantly evaluating whether a PM’s value proposition aligns with their fee structure.
Whitlock’s own behaviour as an owner reinforced the lesson from both directions. The PM who won his long-term business was the one who came to his home and spent two hours sitting at a kitchen table, going through the management plan in detail before a lease was signed. That investment of time created confidence that Whitlock has not since had a reason to question. By contrast, on a separate purchase, the sales agent involved finally circled back near settlement to pitch the agency’s PM services.
“By the time the sales agent came towards the settlement and went, hey, we’ll manage it for you – it was too late,” Whitlock recalled.
“It’s gone.”
Service and retention go hand in hand
The two stories sit together in his head as a single observation about how property management is actually won and lost. The PM who earned the relationship earned it by treating the conversation as one worth taking seriously up front. The agency that lost the management lost it by treating the conversation as something to get to later. The decision was made, in both cases, well before any contract was signed.
“If you’re not looking after your people, that’s it,” Whitlock mused.
The owner who feels their property manager is working for them by communicating proactively, reviewing rents, providing advice, and treating them like an investor rather than an account number does not switch.
The owner who finds out the relationship was effectively administrative will switch. Alongside this, they will find out that switching takes less effort than staying did.
For agencies thinking about retention as a separate workstream from service quality, Whitlock said they are wasting effort on the wrong distinction. Retention is service quality.
There is no other lever available, because the structural ones never existed in the first place. The cost of getting the service quality wrong is one email – and most owners now know that, he concluded.
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.