Managed cracks $6bn in direct rental transaction

Managed is a comprehensive property management platform built around secure direct rental payments. The model enables transactions to be identified, allocated and routed between tenants, property owners, agencies and trades without the agency receiving or holding rental funds in a traditional agency-operated trust account.

The platform also incorporates property management CRM, compliance tools, a trades marketplace, owner and tenant portals and a task-based Action Centre that supports the day-to-day management of a rent roll.

Managed CEO Phil Tarrant told REB the transaction milestone reflected a broader evolution in the way Australian consumers and businesses expect money to move.

“Payments technology has been part of everyday life for a long time,” Tarrant said.

“Most Australians routinely transact through digital payment gateways. They understand these systems, they are comfortable using them, and they increasingly expect payments to be fast, visible and easy to track.

“It was inevitable that those expectations would eventually flow into real estate. What we are seeing is a natural evolution in the way rental payments can be managed.”

An alternative to trust accounting

Tarrant said the emergence of direct rental payments should not be interpreted as criticism of Australia’s established trust-account framework.

Trust accounts remain a regulated and widely used method of protecting client money. Agencies operating trust accounts are subject to strict record-keeping, reconciliation, supervision and independent audit requirements.

“Trust accounts have served the real estate industry for a very long time and will continue to be the appropriate operating model for many agencies,” Tarrant said.

“They are regulated for good reason. They provide a clear framework for agencies that receive and hold money on behalf of their clients.”

“The development of direct payment infrastructure, however, now gives agencies another way to structure the movement of rental funds.”

Under the Managed model, the agency continues to manage the property and the customer relationship, but does not take custody of rental funds within the direct payment flow. Payments are processed through Managed’s Australian payment partner, Zai, and routed between the relevant parties according to authorised instructions.

Tarrant said this distinction was central to the Managed proposition.

“The agency can manage the property without the burden of managing a pooled account containing other people’s rental money, or in other words trust money,” he said.

“That can remove a considerable administrative burden, but its significance goes beyond efficiency. It changes the agency’s exposure to the risks that arise when client money is received, held, manually reconciled and disbursed.”

Strong appeal for new property management businesses

Tarrant said newly established property management businesses were particularly well suited to the direct-payment model because they could adopt the infrastructure from inception.

“It is much easier to establish a business around a new payment architecture than it is to migrate an established rent roll with years of embedded systems, procedures and customer arrangements,” he said.

“New operators are not required to unwind an existing model. They can consider how they want payments, workflows and customer communication to operate from their first day in business.”

“We consistently see strong interest from start-up agencies and sales businesses establishing property management divisions. They are looking at the systems available today rather than automatically reproducing the operating structure of the agency they previously worked for.”

Tarrant said this was also becoming a point of differentiation when agencies competed for new managements.

“Property owners increasingly want visibility, speed and certainty around their rental income,” he said.

“An agency that can clearly explain how money moves, when the owner will receive it and what controls sit behind that process has a meaningful proposition when it is trying to win a new door.”

Payment infrastructure developed with Zai

Managed has developed and refined its payment technology with Australian fintech Zai since the platform’s early growth.

Zai provides the underlying infrastructure supporting Managed’s payment workflows across Australian payment rails, while Managed incorporates those capabilities into the broader operation of the property management platform.

Andy McCutcheon, chief customer and operations officer at Zai Payments, said Managed’s growth over the years had been “genuinely impressive”.

“It’s been steady, sustained, and built on strong operational foundations, which is exactly what you want to see in a platform moving money at scale.”

As Managed’s payments partner, Zai Payments sees exactly how the platform performs under the hood.

“Managed runs a high-quality operation across every payment rail they use, and their disciplined customer due diligence has kept disputes and fraud to a minimum even as volumes have grown.

“That’s the mark of a platform that has scaled without compromising on the fundamentals. Zai Payments provides the infrastructure behind complex payment flows across all of Australia’s payment rails, and our role is to let platforms like Managed focus on their customers and growth.

“What Managed has built speaks for itself, and we’re proud to be part of the story,” McCutcheon said.

Tarrant said the $6.2 billion milestone demonstrated that direct rental payment infrastructure had moved beyond being simply an emerging concept.

“This remains a developing part of the property management market, and traditional trust accounts will continue to play an important role,” he said.

“But agencies now have greater choice in how they structure their operations and the movement of rental money.

“The significance of this milestone is not that one system must replace another. It is that secure direct rental payments are becoming an established and credible part of the industry’s future.”