While many agencies view Victoria’s PM market as the most challenging in the country, the CEO of Housemark sees it as the biggest untapped opportunity to reach 1,000 PUM in three years.
In The Property Management Excellence (PMX) Podcast with REB director and Managed co-founder Alex Whitlock, Natalie South listed several reasons why the Victorian property management market is currently not attractive to agencies. When they see Victoria, they think of strict legislation, high compliance costs, and notoriously low fees.
However, South sees the glass as half full, stating that Victoria is “essentially the ugly stepsister that we want to turn into the cool kid”.
Housemark, which has grown from zero to 3,500 properties under management in seven years across Queensland, launched into Victoria and is already onboarding 15 to 25 clients per month. The agency’s fee in Victoria is 7.7 per cent – significantly above the market average – and South expects to reach 1,000 properties under management within three years.
“We know that the fees in Melbourne and Victoria are substantially lower than what we achieve in Queensland.”
“But we know where that fee structure needs to sit to make sure we're not sacrificing the level of service we need to provide.”
The confidence comes from two sources. First, South said, Housemark’s existing Queensland partners are already buying property in Victoria and want the same service model in that market.
“One partner has committed to 1,000 properties in the next three years, in terms of those properties they’re buying.”
Second, the agency is converting new clients at a pace that validates the premium fee model, she explained.
South provided a blunt assessment about what happens if the fee model doesn’t hold.
“If we can’t maintain those fees, then we cannot take on that rental provider, because that means we’re going to have to sacrifice the resourcing of our staff, the quality of our staff, and ultimately the level of service.”
“We’re just not willing to do that in any market – but specifically a market where it costs more to manage a property.”
On the numbers, South points out that a 1 per cent difference on the average Victorian rent amounts to roughly $580 a year – a premium she argues is easily justified when the service model is built around robust relationships with clients rather than transaction volume.
“I think together the Victorian market can continue to rise and hold their fees and demonstrate value. That way the industry as a whole in that market can be respected more, have less fatigue, have more training, and take a lot more pride in what they do.”
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