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Speaker B
My name is Liam Garmin and I'm the managing editor of Real Estate here at Momentum Media, the team that brings you real estate business. And thank you so much for joining us on our live stream masterclass. And today we're unpacking something that's very interesting, a phenomenon that's happening in the world of property management. And just a few months ago, Agile Market Intelligence undertook some research which indicated that 30% of property managers were looking to move away from trust accounting and if they could restart their businesses, would go without traditional trust accounting. And from a journalist perspective, it's easy to understand why. It seems that every week there is a new story that comes out around trust account abuse and misuse. And needless to say, this represents a very big change for an industry which has operated business as usual for the past few decades and also represents a substantial step change, in particular for principals and agents that are looking to deliver better products for tenants and landlords, but also as they're looking to navigate financial reputational compliance and legal damages to their company in the event of trust account abuse. But today's not going to be a debate. We're looking to explore this phenomenon and this step change. And I'm joined by two agents who recently appeared in REB's inaugural Stell Agencies ranking, which identifies those new independent agencies that have demonstrated substantial growth in their rent roles and throughout the live stream today. Please do submit your questions. I have an iPad here, so as your questions come up, I'll, I'll take the chance to answer them as they come through. But before we start off, I'm going to invite our guests to introduce themselves interest to take Ashley Merlot, co director of the Property Colab Grant McKay, director at New Management Rohit George, COO of managed and Alex Whitlock, Commercial director at Managed. I think it's a good chance for us to go around and introduce ourselves A few quick minutes about what you do and what your businesses do. And I think we'll start off with yourself, Ashley.
Speaker C
Great. Good morning and thanks so much for having me here today. I'm Ashley Merlo. I'm one of the founding directors of the property company. So we're a specialist property management agency that services the northern beaches and Lower North Shore. And I'm super excited to be here, so thanks for having me.
Speaker B
Thanks, Alex.
Speaker D
Alex Whitlock. I've been with manage since 2018 when it was first sort of conceived by one of the founders, Tom Richards, who was a frustrated property manager. And I've very much enjoyed the Journey seeing its growth and seeing how it's empowering agents along the way.
Speaker E
Sure. Grant McKay, I'm the director at New Management. We're based in the eastern suburbs and looking predominantly after the eastern suburbs area and cbd, similar to Ash, that we are a property management specialist company. So don't do sales. That's our core business and what we focus on.
Speaker A
Ro. Yeah, Rahith. I'm the chief operating officer of Managed. Started back in 2019 as a founding employee and now run all the operations of the business.
Speaker B
I like how you really embrace the world of tech because you're the only one that's come in a T shirt.
Speaker A
It was a debate, but yeah, what's natural?
Speaker B
I mean it does give, it does give an element of credibility that hey, I work in tech, I'm going to dress down and the white hoodies for everyone. I think you're sockless. So you work in property. But that is enough today. Look, it seems that every week in the world of real estate journalism there are new instances of trust account abuse which has prompted us to have this masterclass today to analyze, well, what alternatives out there, what other platforms, products are on the market. If you're looking to change and getting a thumb on the pulse of what industry is thinking, especially in terms of traditional trust accounting as a place to start, Alex, I'm going to throw across to yourself to set the scene on, on what some of the risks associated with traditional trust accounting are.
Speaker D
Thanks, Liam. I'm not an agent, so I don't really want to get into the whole challenges around running a trust account. There are obviously tens of thousands of agents that run trust account in an ethical and compliant manner. Unfortunately, the actions of a few do taint the majority. I kind of want to step away from that really. I think it's more a matter of looking at payments as a whole. There is just now, through the advances of technology, a better way to transact, a cleaner, more simple way to transact. And not just between tenant and landlord. This is not just a tenant landlord proposition via the property manager. We're looking at an ecosystem of tenants, property managers, owners and also tradespeople. So I think really taking an opportunity to look from a payments perspective, to bring the whole ecosystem together to build a transparent, simple system with no reconciliations that then feeds up into a daily platform that helps you run your business. I just think there's a wonderful opportunity to kind of look beyond what has been the mainstay of property management for the last 80 odd years. I think trust accounting has been around for a long, long time. There's just a better way Now.
Speaker B
A lot of people that are listening to this masterclass would be involved in property management. Some of them might be looking to diversify their business. And this is what our market intelligence, our market research has shown that because rent rolls are such a tangible function for a business that it goes beyond the regular sales cycle. You have to understand that sometimes sales cycles might go up and down, but you'll have your rent roll hopefully for the long term. So I'm going to guess that there are a lot of people listening to this that might be looking to expand into that area. Ro, can you take us a little bit deeper looking under the hood, what does trust accounting look like now and what alternatives are out there? And this is particularly for people that might be a bit new to the industry.
Speaker A
Yeah, I mean look, trust accounting is definitely, as Alex said, you know, it's the mainstay. Majority of the industry has been doing it for 80 odd years. It's more about what does a business want to look for in growth. For most of it is operations like how do I operate more efficiently? And humans are always impacted when you try to introduce new software. The way we see it is trust accounting costs have just increased year on year and unfortunately there's also a reduction in those resources within the industry as well. I think new technology should always help businesses operate more efficiently. How do you also introduce a better experience for your investors and your renters And Grant and Ash would be great to provide some insights into that. But at the end of the day, like transparency is key but how do you provide a business the ability to grow without those costs increasing? So if you go from 100 properties to 500 properties, that should not scale in terms of your costs. Ideally new technology should try and keep your costs as minimum as possible while reducing the admin for your team.
Speaker B
And Grant, how long have you worked in property management?
Speaker E
Well, I'm interesting background probably compared to Ash that I was a sales agent, a business development manager and then a property management owner, company owner. So I wasn't previous to starting new management I wasn't property manager but as a BDM I worked alongside. So observing a lot of things that I felt worked and didn't. You know we always have more opinions on the sideline but new management is we've just had three years and we've only worked with managed.
Speaker B
So what was the reasoning behind your choice of Managed and automatic payment platforms?
Speaker E
For me, you know I was a good candidate probably because I didn't have any strong preconceived ideas. There was no, I didn't have a strong sort of habit of, you know, trust accounting and the products that are in that space. So I was a blank canvas, so to speak. But I was about to sign up with one of the, you know, traditional PM systems that use trust accounting and just reconnected with manage because I had heard of them a few years back, prior to that. And for me, what I was when I was starting new management is something that I personally wanted to try and simplify and yeah, to look at how do I enhance the experience for everyone involved. Managed aligned quite nicely with that. Plus, you know, I was a single operator who hadn't had years and years of property management except experience. I was looking for the simplest, you know, what was still a legal system, but just the simplest way to run something in the background and be able to focus on client relations. Worked perfectly for me.
Speaker B
Yeah, and I think that opens up a larger conversation which we'll get to a little bit later in the master class, especially how automated payment platforms can be used to scale a business. But one of the core benefits in alternative platforms is that you do have a streamlined customer experience that you can say hand on heart to clients, that ultimately you're getting your payment immediately. It's not sitting in an account where they don't have any visual oversight of ash. One thing that you and I have been talking about is you pride yourself at the property collab on providing really good customer experience and customer satisfaction and that's something that you pride yourself on. How would trust accounting play into this and how do alternative payment platforms play into your ability to say, give your clients the best possible customer experience?
Speaker C
Yeah, that's a really great question. I think the reality is I kind of have two different sides of thought. I've got my property manager brain, but then I've also got my investor client and my tenant side as well. I think from a property management perspective, and we will touch on that a little bit more about how you can automate and scale. But I think from an investor standpoint is everyone operates differently in terms of cash flow and ultimately how they manage their money. So speed is the new currency. People want it in lightning speed. So for us to be able to transact with our clients instantly, ultimately we want our clients money working harder for them and it's better off in their account versus in our trust account until the end of the month doing absolutely nothing. That's from the payment in perspective, but also from the Expense perspective, all different types of clients manage their cash flow very differently. And so from a customer experience perspective, being able to give our clients the opportunity to pick and choose how they want to pay their bills. And so for us, they can have expenses paid from the traditional model, from the rent, but we can also have it paid through, through direct debit or from a credit card. And plenty of our clients like to generate points, so it gives them option of choice. And I think from a customer experience perspective, it's not necessarily about what we think is the right way, but what's important to our client is the most.
Speaker B
Important thing, of course. And I think it's very reasonable to look at this, that you're a tenant of today, for example, might be a client of tomorrow, which especially as we walk into the world of rent vesting or uptake in investment properties as well, that providing that essential service to your tenants of today will actually have a long term growth funnel for you. In the world of property management. We know how stressful it can be, Ash, especially as you're dealing with such a large rent roll and the real profitability comes in the scale in which you're able to operate that rent roll. How does, how do alternative properties payment platforms streamline your ability to help people? What's a day in the life of.
Speaker C
It's an interesting question and it was something Grant and I were actually chatting about before we came in today because our business has been up and running for nearly six years now and we've been on an automated payment platform since the very get go. So operating a trust account seems like a thing of the past. And when I was preparing for today and actually going through all of those processes that we used to do, there is so much time, energy and effort that goes into that. So even like daily bank reconciliations, that doesn't have to happen. Our clients receive it instantly and both our landlords and tenants have full transparency on that. So from a timing perspective, we don't have to worry about mid month, end of month, daily bank recs, anything like that. It's literally instant. So the minute that our tenants are paying, it's going straight to our client as as well, and it's all available to them.
Speaker D
Can I just jump in? So I think it's fascinating to hear from the property management side of things. I'll just digress for a second. The reason that I'm sat here today when Tom Richards came along and sort of pitched us on this idea, his first Tom Richards was a very successful and very young and very Ambitious property manager. And he was thoroughly frustrated with the manual aspects and the cumbersome process around trust account management. So he came along to speak to us about investing in a new type of agency which would be built around this technology. And as an investor, it resonated a great deal with me. I've used property managers for my investment properties for decades. But then I looked at what he was talking about building and I thought, look, I'm not going to be any good as a property manager or being involved in a property management business. But the tech you're talking about building as an investor, as an owner, why wouldn't we build this and make this available to the broader marketplace? And Tom sort of pivoted and he went, okay, yeah, you know, because it was the tech that was the good thing, not his own agency around that. So I look at this very much. I think it's quite an interesting angle to come in as an investor and as an owner, because trust accounting software is built for trust accounts. It's not even really built for property managers.
Speaker E
Right.
Speaker D
But at the very best, it's then something that property managers use as well as the other bits associated with it to manage those payments in and out. There's an opportunity, and there has been opportunity to build an ecosystem that treats, that gives an owner much more direct access to their money. And I think if you ask any owner out there who uses a property manager and we advocate, you know, through the media brands, we very much advocate using a property manager, and I do on a personal level. But any owner that uses a property manager asked if they would like to have their money sat in a trust account for X number of days or to go direct from their tenant into their own bank account through a secure gateway, I reckon there'd be very few of them say, oh yeah, stick it in a trust account. Thanks.
Speaker B
And there's three ways of looking at this. There's firstly, the business aspect from a property owner and someone far smarter than myself who's listening at the moment, maybe they'll email through or put it through slido. What's the saying? It's the proofs in the exception. I think that's the rough gist of it. But when you're in a property management company business that is using automated payment platforms and you say, well what, how would we operate if we go back to traditional trust accounting? And Ash, it's your point before was that, well, we'd have to have someone additionally doing compliance. Well, we'd have to have someone additionally checking ledgers every Month. But we'd have to have this person doing this additional task, that additional task. So it's the proof's in the exception that's like, well, you wouldn't go backwards. You wouldn't go back to using a traditional trust account, which is demonstrating the efficacy. And the other two. Alex, your point about an investor, which Ash touched on before, which I think is very reasonable. We've had, what, 13 rate rises. It's very reasonable that you want money ASAP sitting in your offset account when the interest rolls through at the end of the month, and especially for tenants. And I'm going to throw this across to Ro, because just around the hustings, you and I have had a few conversations about your opinion with tenants and how this is from the perspective of actually helping people on the ground. This is a great way of helping them. I did a quick search and 4,100 jobs for property managers. It's a hard job. This is a job where you need to really operate in scale. There's a lot of churn in the industry. There are a lot of pain points. Ro, how do you work with clients to identify ways in which you can make their lives easier?
Speaker A
Yeah, I mean, I have so much respect for property managers. They're the only people I talk to every day, which is interesting. I was in real estate before, but I know how heavy it is in terms of administration and how little the love is as well. Like, you get so much stress order every day. Property managers are firefighters. Like, you're always dealing with pains and most of the time it comes after hours, as you guys would definitely know where people are messaging you at 2am oh, there's a leaking pipe or whatever it is. And your team are already incentivized to focus on the investors, right, because they're the ones who actually pay your bills. But the reality is the good operators know that. Well, a very good relationship with your renters means money comes in quicker. You get your management fee, you get money to your owners quick as possible. So a good relationship with the renter is obviously going to impact your investor. At the end of the day, platforms and technology, regardless of what it is, should only enable that better experience. So from renters, they only care about one thing, fast and free payment methods. That's it. Like, at the end of the day, you need rent to come in as quick as possible. They don't want to be in arrears. Majority of renters, like, just want to pay their rent. They're putting a house over there, their families so for them, giving them like platforms that ask them to pay exorbitant transaction fees or the like to just try and pay rent is ridiculous. At the end of the day, they should have fast free payment methods. That's it. Don't ask them for like personal details like bank, give us your bank account to debit them. No, just give them something super simple so they can just get that, make the rental payments and move on with their day. And then obviously technology should help them with the other aspect, which is to manage things like maintenance because that happens naturally. There's always like a natural attrition and issues that happens within the property. You basically want to make sure that if there is an issue, how do I communicate it to my agent as quick as possible and how do I make sure that they've seen it and they're going to action it as quick as possible as well. Because at the end of the day they deserve to live in a safe and well maintained property.
Speaker B
Now I was actually going to wait a few more minutes because we're really early into this live stream before I go on to some of the questions from the audience. But we're getting a lot, so I think we're gonna have to start fighting through some of them. And I think actually the best place to start. Ro, what's the legality of this system of managed or the trustless?
Speaker D
This is the elephant in the room. This is really important to address.
Speaker A
Yeah, absolutely. Look, everyone always asks like, how does, how does the system operate? How do payments work? You know, we've had the craziest, like, you know, amount of sales inquiries at the start of this year and it's the first question they all ask and that's like, how do you operate? Well, super simple, right? Traditionally, always money was sent into a trust account because that was being managed by the agency, which it should, if you ever manage someone else's money, run a trust account with a platform like Managed. And I can only talk about managed and how we operate. Every single user has very, very siloed, unique digital wallets. A tenant has a wallet, owner has a wallet, tradie has a wallet, agent has a digital wallet, the exact same way PayPal operates. So tenants are no longer sending money to this bank account, this trust account that's communally holding, you know, 500 renters funds plus owner funds plus tradie funds plus BPay bill for your council water rates. It's like crazy when you look at how much you think about how much money is.
Speaker B
Everyone's heart rate is increasing.
Speaker A
Yeah, yeah, yeah. Whereas now a tenant sends money to a wallet that they own, they can literally fund it. It's owned by them. If they send too much money, they log in and click refund instantly back to their own bank account. Our system, our little engine basically splits it. We always send the management fee to the agency first and then the net rental funds. We've got a smart wallet that either goes, do you have bills upcoming? If the answer is yes, let's hold the funds, if no, instantly to that owner's offset account. That's. That's kind of the simple gist of it, but yeah.
Speaker C
I think on that note, though, you might want to also mention when they can refund money, it's not money that's already gone out to the owner, because I think from a property management perspective, that would cause a lot of concern, thinking, well, how can they just refund the rent that's already gone out once the funds have gone? It's not that simple, but it holds it in a. In the digital wallet.
Speaker A
In their wallet, yes.
Speaker D
But the bottom line is that agents don't handle any money and so they don't need to hold a trust account. It's only trust accounts that were established to ensure that both tenants and owners were protected from misappropriation. With platforms along, you know, sort of similar to ours, I can only speak about ours. There is no handling of money. It is direct from tenant to landlord. The agent, all the agent receives is their fee.
Speaker B
And that is an incredibly important part.
Speaker D
I'll just add something as well. I think there's going to be some people tuning in that are going to wait for legislation to change. They're going to have a long wait because legislation always lags innovation. It's a key thing. You know, we've got about. I think the survey said there was maybe up to maybe 10% of the marketplaces using sort of automated payments. The indication is that you've got 30% of agencies said they would now start without using a trust account. And I suspect when we conduct the survey again in another year's time, that will have increased. It's going to take legislators a long time. Their main concern is that agents are not handling money. And if money goes through their agency, they use the trust account. That's been sort of outlined as what they have to use by law. So, yeah, if you're waiting for various consumer fares and fair trading to give the rubber stamp, it's probably not going to happen. But we've got agencies that have been operating for a long, long Time using this alternative system.
Speaker A
That's not like people go, oh, is there a letter to show it's compliant? Fair trading doesn't work that way. Fair trading goes, you're either compliant or non compliant. And if you're non compliant, no one would be operating.
Speaker D
And we're on the same side as fair trading. We're transparent, Our platform is transparent and it is there. It can be audited, it can be viewed by those that govern and regulate property management transactions. And we very much are on the same side of them. We want to eradicate fraud, we want to eradicate theft and misappropriation.
Speaker A
And to that, like, credibility wise, like, you know, we're not a new business. We've been around for six and a half years now. We process $110 million a month across the country and we crack three and a half billion dollars. So we're processing a lot of money across the nation for a lot of agents.
Speaker D
We've also got, I think, you know, in terms of scale of. Can I speak again about our platform, but how many digital wallet holders? You've obviously got a helicopter view of the whole ecosystem.
Speaker A
This is tenants over 250, 50,000 wallets.
Speaker D
Yeah. So there's a lot of people on this platform and it's been working for six years without any hitch or any scrutiny from any sort of authorities.
Speaker B
Now I'm going to take a little bit of a step change because we've touched on it a few times throughout the masterclass so far, which is in the world of property management, you are aiming for scale and a bigger rent role. Grant, you've been running your property management business for, I think you said three years. Three years. How did this provide the efficiencies that enabled you to scale?
Speaker E
I mean, there's not a lot of depth to my answer. It's just, it was, it gave me. It was simplicity to the business, particularly someone who was, you know, coming from the outside, entering and very quickly having to feel like I had to get across a lot of aspects of the property management. I hadn't been doing it for years, I'd been working alongside it, had a good understanding, of course, legislation, notice requirements, all of that. But I was looking for a simplest way to get all the operations covered and packaged up. And a lot of that these days is tech. I think we're going to talk a bit more about the tech stacking that a lot of property managers will need these days, but it just allowed the simplicity to my business to do what we needed to do on a daily basis. Which is look after the tenants, make sure repairs, maintenance were done in a timely manner, communicate to everyone involved and to look for those opportunities with new clients. The thing that I quite liked for me with new management, I felt quite strongly about representing something that was quite different, so quite new and fresh and the trustless sort of setup was, you know, it was something that was talked about a lot out there and it was start. The concept was starting to be embraced, but the fact of feeling like I was at the forefront of that, it just aligned with what I was doing with new management. So I certainly spoke to a lot of industry people with a lot of experience and definitely got the yeah, buts and I'm sure they'll. Questions will come through. But a lot of the things that were raised for me as the hypotheticals, either the tech has improved in that three years and features have come, or it just hasn't been an issue. But I think if you're an agency, and I say this to operators, if you're an agency that aren't confident in your client communication, you know, you don't feel that you effectively onboard a new landlord. You don't have an onboarding process or a communication, you know, good touch points with tenants at the start. Yeah, sure, it might be a concept that's a little bit sort of different, but I've not had any, any sort of drawbacks with that at all.
Speaker B
Yeah, and you said something which, which I do want to draw down on, which is, which is the role that this plays in the tech stack. And especially if you're coming into this industry now, you have the opportunity to, to rethink business as usual. And you'll have the opportunity to build out a tech stack which allows you to scale. What are some of the essentials in building your tech stack?
Speaker E
I mean, I look at my, you know, you do look at your subscriptions each month and sort of go, okay, God, I'm really a tech company rather than a property company. But I do like it's. I very much say we're a people business. I think we're a tech business and then we're a property and a repairs and maintenance business. Thirdly. But we have now, I mean, it's amazing that even in sort of 10 years, I think we've got, we run, you know, software that interfaces with real estate and domains. All the inquiries are being looked after, responded to and, you know, tenant prospecting is happening in the background. You look at, do you want me to name products or.
Speaker D
Yeah, sure, go for it.
Speaker E
So inspect real Estate we use, I find that quite powerful. The whole application process compared to what it was many years ago. The fact that that's all automated and of course at times you still need to pick up the phone and cross check something. But that, I mean, that used to be a whole day of making the calls and you had your little checklist and that just doesn't occur, not in my business. We're paperless, but, you know, flicking over is incredible. Managing all the lease agreements and rent increase notices, all of that obviously managed. We then run CRM, we've got HubSpot, we do Trello, which is a secondary workflow that works for us. Some people may be doing that within Manage and then from a brand and marketing perspective, we use Rate My Agent as well. We're very big on the reviews and the transparency of our business and the feedback on our business. That's probably, probably other things there.
Speaker B
So a lot of this discussion centers around that modernisation piece and how you can disrupt business as usual. Ash, how does that tie into customer experience? Because if you're a property management business, you might think, oh, we're going into the unknown with this, we're disrupting our processes. How do you reconcile that with giving a tenant or a landlord good experience?
Speaker C
Yeah, I think ultimately we have, like Gran said, we've got more tech than you can poke a stick at, but I think technology is there. Ultimately. We're in a relationship business and we're there to look after our landlords, our investor clients and our tenants. The technology that we use is to support us in having those great relationships and then also allow us to remain compliant. So on top of what Grant has just discussed, you know, even for example, like simplifying our inspection process. So we use Inspection Express, we use the new AI 360 feature, which I think is ultimately. That saves our team time, which means that we can spend more time on focusing on our client and similarly to automated payments, at the end of the day, removing a lot of that administrational component through the automation actually allows us to spend more time focusing on what's important to our client, which is ultimately maximizing their return on investment and, and minimising their exposure to risk. So technology's there to support us, it's not really there to remove that personal component. So it just frees up time.
Speaker B
How many people are your team?
Speaker C
Five.
Speaker B
Five. And how, I would hazard a guess, cutting through it comes down to allowing your. And I'm putting words in your mouth, so do correct me, but it's allowing your People to be more dollar productive. You know, you're cutting away with the admin burden, the compliance burden, the administrative burden, to allow them to be dollar productive, to allow them to get more people into grow the rent roll. How do your people find it?
Speaker C
Yeah. So I guess at the end of the day we've been hearing about this. Like this is my 18th year in property management, so I've been around for a long time and people always talk about communication being the number one thing and at the end of the day it is. We've got a bit of a rule in our office. By the time someone contacts us, it's too late. So using all of the technology that we have available to us, we've been able to automate it to help us scale, but also be able to communicate with our clients efficiently and ultimately before they contact us.
Speaker B
We do have a question that has come through from the audience which is measuring the savings. So you've been property management for 18 years. What are some of the savings that you would make in your business in terms of. In terms of. If you were to cost. In terms of cost, I guess in.
Speaker D
Terms of coming away from the trust account now with automated payments, what, the material cost that you're saving?
Speaker C
Yeah. So from a cost perspective, I probably look at it a little bit differently. I'm very big on. For us, the culture of our business is paramount. You know, property management is a hard gig, like you said, so we look after our people first because ultimately it stems from the top. So if our team are well looked after, that money that we've saved in those other bits and pieces, from a trust accounting perspective, we actually put that back into our people. So it allows us to pay our team more, which means that we can have greater touch points, we get better experienced people. We've got really long standing tenure rate of people that join our team. So yeah, from a time perspective, that money we're investing back into our people, which then flows down to our clients. Yeah. Hopefully that answers that question.
Speaker B
No, it absolutely does. Again, just. Just addressing some of the questions from the audience and a lot of them, I'm going to throw this across the row because it's a hard one, but a lot of it comes down to inputting costs and how you can input costs into in particular managed, whether it's paying creditors rates, et cetera and general invoices and how you would then potentially that's one part of the question, how you input those costs. But what if there are inaccuracies with some of the invoices that are uploaded.
Speaker A
Yeah, I mean, we had a sale inquiry, so it's pretty much asking the same thing, like how do bills work? And Grant and Ash would know it quite well as well. But it's a very simple system. Like, you know, we've got that smart wallet, there's an engine there that sits there and basically wants to calculate what bills are upcoming. As long as you schedule it, it will hold the funds back. Doesn't matter whether it's for a tradie, whether it's for a bpay, council, water rates, insurance. The smart wallet will hold it up always depending on the due date of those bills. But to the latter part of the question is when you look at a payments platform, obviously at the end of the day it needs to operate in a smart, efficient way and needs to get money from source A to source B as quick as possible without error. We have a lot of customers who do offshoring, so essentially they get someone from an accounts team to go in and enter bills. What they do is a two step process. Someone wants to either input it and schedule it straight away, or the other alternative is they input it and someone goes and authorises it. So you can enter a bill and leave it in what's called draft mode and then reassign it to the principal or someone in accounts to go and actually review that bill before it's scheduled.
Speaker C
I just want to jump in on that point because that's obviously like the workflow and how it happens. But also in the world of property management land, paying bills is exactly the same way as you'd pay bills with a trust account. You still have to enter the bill for payment and ultimately if the owner chooses to have it be deducted from the rent, it'll just hold it back from the rent. It just means that you have to be more proactive with entering those accounts versus historically, you know, accounts people may hold those bills and enter them just before end of month before they do their disposal disbursement. Now you have to be a lot more proactive. So for us, all of our bills are entered within 24 hours of receipt. So you do have to be proactive, but it operates theoretically in the exact same way.
Speaker B
But that gives you a more thorough ledger at the time at which stuff's going on. The other question, Ro from the audience is over data and concerns that perhaps will. I'll give you the exact question. I won't. I'm worried some other agency might be able to get my data. How do I know my information is not accessible to competitors.
Speaker A
Yes, it's a great question. Look, your data's secure. We've never shared data from one agency to another. Doesn't matter if you're a corporate network or the like.
Speaker D
Can you explain how though? Like it'd be good. I think it'd be good to sort of explain how there is the uniqueness of data and how it isn't in a sort of a pool that's shared around. And I think it's also important to say, you know, just before RO goes into that. So we're an independent business. We're not owned by another real estate group. I know there's a couple of other platforms that are out there that are owned by big agencies. We independent. So we're not beholden to any real estate master. So we've got no, no sort of need to make any of our data available to anyone else.
Speaker A
Yeah, and look, security of data is probably the most important question that's happening right now, especially from investors. They're your biggest asset group as any agency knows where your data is stored and we actually have. It's very public on our knowledge base about how we store data and the security of it. So Happy, if anyone goes to manage, there is a knowledge base which actually specifies the security of our data. But look, as Alex said, we're independent. The goal is that we want as many agents to use a safer, more secure platform without the fear of any of that data being shared across from one agency to another or to any of their competitors or from one network to another. Being independent allows us to ensure that we are as strict as possible to that paradigm.
Speaker B
They're all coming through. So I'm not sure even the best person to direct this to. I'm going to throw it to the floor and we can all pick at it. Our trust account is also used for sales transactions. Do you have a solution for those too? If not, an agency still needs to have a trust account and some of the overheads still applicable, I.e. audit fees and staff fees.
Speaker D
So we deal just with property management. We don't deal with the sales side. If a business has a sales operation, they will need a trust account for their sales.
Speaker A
Yeah, I mean, and it's very specific to the Property Stock and Agents Act. The Property Stock and Agent act is very specific for sales and you have to send money that's to either a sales trust or to your conveyance's trust. Property management. You only need a trust account if it's being handled by the agency. But yes, look, if you do run a sales operation, you will have it. The reality is that you might have 50 or 100 or 200 transactions.
Speaker D
Yeah, I'm going to guess there's an awful lot less traffic to and fro than the daily reconciliation.
Speaker C
They have to have the separate one anyway.
Speaker A
You do? Yes. Yeah. The goal for us is how do we reduce 99% of your, your workload when it comes to managing a property management trust account?
Speaker B
Young people aren't interested in being property managers anymore because it's seen as old fashioned and hard Managed is looking to help more people to become PMs and someone just voted that up. Gosh, now it's just disappeared.
Speaker D
So I'll just pick up on that. And this is, this is an important issue. The reason that I'm here is because I'm an investor, I'm an owner and I've always used property managers. And every property manager that I have ever dealt with, bar pretty much none, have always been extremely hard working, conscientious and outcomes focused for both me as an owner, but also for the tenant as well. It's a tough industry and I think there is an unnecessary burden and responsibility and I would imagine stress around management of money that is probably holding younger people from coming into this industry. And I think people come into property management care a great deal about people, but I think there's a barrier with unnecessary administration. So one of the things that we are looking to do is to we're going to work very hard to promote the benefits of working in an agency where you can do the things that you want to do, working with owners and working with renters and really sort of, you know, facilitating a better renting experience. So I think there is a way to help attract new blood into the industry.
Speaker C
I actually think it's a great question. I think it's a real positive because you know, young people really like technology and I think by using technology ultimately, like for example one like Managed or any other of the other products out there, it gives them the ability to not be so tied down with the administrational component. And it actually like property management's a really beautiful industry to work and you get to work with some incredible people. And yes, there's times it can be hard, but it doesn't need to be so hard. And I think using the right tech and the right communication can actually make it a really beautiful space to work in.
Speaker B
So on that note, so that question you get to vote, that's the amazing thing. We get to prioritize our questions that are coming through and that's getting voted up really high. Ash, if you could do, if you could do one thing that could make the lives of your team easier or one thing that you have done which allows you to keep your PMs in your business and not go down the road for an extra 5k, what have you done that's worked?
Speaker C
I think that we've done a lot, so it's hard to pinpoint one individual thing. But again, it comes back to people and as I mentioned earlier, we invest heavily in our staff. Property managers are craving, they want to learn and grow and typically property managers don't want to do a bad job, they don't want to be getting complaints, they don't want to be feeling overwhelmed and going home stressed. So I think for us, from my business partner Stephanie and I, we really want to put back to our people so we spend the money to look after them and train them and give them the support, the hands on support that they need ultimately to thrive. It's an industry where I think a lot of people have been kind of fallen into it and they don't necessarily, they've never owned an investment property before, so not even, you know, they don't know how to handle those conversations. So in being able to lead and guide them, it's been a big thing for us and we invest in that.
Speaker B
And grant three years in the industry. What are some of those key tips that you've learnt to keep your talent and not only grow, but thrive in property management?
Speaker E
I don't want to sound negative, but I was determined to not look sound and act like another property management company that's out there or property management division of a real estate agency. That's not to say there's not good operators out there. There are good brands, good operators, good offices. But my general experience being a bit older and talking to people who'd been renters and landlords, we certainly have an image problem out there. And to tie that back into Managed, if anyone goes on and looks at Managed, if you've used it as a tenant or a landlord, it looks and feels a bit like an Airbnb, an Airtasker product. So rather getting too down to the features and the mechanics of it, it just looks like the new age industry, you know, that I think we should be. So my focus on attracting good quality people is that trying to make it a bit sexier because it just. People don't look at the job of, oh, I really want to do that. And I think this tech that comes into play that as Ash was saying, takes away some of the pain points and allows people to be relationship managers, allows people to be financial advisors, not professional, but, you know, advisors. And that's, that's, that's the, the biggest thing that I'm trying to create. And, and the, the, those that work with me, I want them to not just, yeah, do a job, but feel like they're progressing their product knowledge is progress, progressing there. The way that they can advise a client and, you know, and go through the process of property and markets and the exciting stuff, not the, you know.
Speaker B
You'Re making a party. Yeah. It's like you said, you're working in tech as well.
Speaker E
Yeah, I took a leap. I took a leap with managed. You know, as I said, I had people that were. Won't do this and what have you, but I knew they'd been around, they were getting momentum and, and it just represented something that was sort of new, fresh, simple. And that's what I wanted with property management.
Speaker B
For me, I want to look under the hood with this a little bit. So you can log in as a renter as well as a tenant. You can go onto a platform, you can go from both perspectives. Because we did get a question here. From a tenant's perspective, can you download a rental history report and then use that? Yes.
Speaker A
Yeah. Renters can log in, get their own tenant ledger via the lease dates. I know when I was a renter, I just got like an email of a payment receipt when I was with agents who had renters before.
Speaker B
You got receipts?
Speaker A
Yeah, yeah. Every now and then. No payment receipt with their platforms, I never had a portal to log in. That was something that we changed when we launched back in 2018, like day one, owners and renters needed to have a portal. We wanted to give them something interactive and allow them to feel like they get much better visibility of that property and where they're up to, where they're paid to.
Speaker C
What's the next world that people can't, in 2025, you can't see?
Speaker A
Exactly. And I think, you know, we need to just take a step back. Like, real estate is probably the hottest discussion in this country. Right. Like, everyone talks about property, go to barbecue, is interest rates coming? You know, what's going on? Like, you know, housing crisis, affordability crisis. Like, everything has to do with property. Like, why would you not want to be in real estate? Like, everyone wants to talk to you. So I think it's, it's something that, that is definitely, as Grant said, like a bad image problem within real Estate, unfortunately, it's rated by consumers, mums and dads as the lowest trusted profession, which is pretty bad. So when you see things like trust accounting fraud. Yeah, yeah, yeah, yeah, yeah. But when you see just in general trust accounting fraud occurring, it's just one like, you know, one more kick down the rung. And I think there are so many good operators out there and they only care about good experiences to be able to provide, as Ash was saying, like a really good experience to nurture new talent, show them the positives of real estate. You'll be able to like bring the whole industry up and that's kind of what automated payments should be doing.
Speaker D
I'll just chime in as. So again, as an owner, one of the biggest challenges, if you've got, even if you have one property, you need to do your tax returns and quite often you'll look at refinancing. And then when you go along and deal with a lender, you need to give very, very detailed background to all the transactions and so forth. Rental income with all the deductions, whether it's for your end of year or whether it's to go and touch take out a loan. We've built this platform. I'm an investor, I'm an owner. And so a lot of the focus has been, again, rather than solving a trust accounting problem, is looking at the stakeholders, owners, renters, property managers, and then also tradesmen. We probably haven't have time to get into that side of things. So with using Managed, I can go and log into my platform, I can get immediately a detailed breakdown without having to contact my property manager at my fingertips, I'm leaving my property manager alone. I'm not pestering them for reports. I don't have to wait for, you know, for my 12 monthly summary, I can go and get it there. And then it's also, and I think, as Grant said, like, the platform is intuitive. I think real estate's kind of got left behind, you know, in terms of the user interface. And we're not talking about property managers and the workflows, I'm talking about their customers. Because without owners, there is no property management. Right. You know, you need rental properties to bring tenants in. The platform's built for everyone. It's built for this ecosystem. Yes, of course, the main function and focus is for property managers to be able to run their business more effectively and grow their asset. But it also takes into consideration the other stakeholders, which traditional trust accounting software just doesn't do.
Speaker B
I will actually touch on trades point because I think that's, that's a very unique part. And look, I don't, I don't work in property management, but if I were to put my property management hat on, I'd say that'd be quite stressful, dealing with about a thousand tradies and a thousand landlords and a thousand tenants at any one time. Talk to me. How does it simplify the trades, the fixing process? Any volunteers?
Speaker A
Do you want to talk about how you do it in the real world or.
Speaker C
Yeah, so I guess from. Again, I think we don't really need to overcomplicate it. It is very similar to a traditional model, what tenants really like. And if we're talking about from a customer experience, from property management, land doesn't change. You still have to engage the tradie, but from a tenant's perspective, being able to simply lodge it through their smartphone, iPad, online, however they like. They can upload photos, videos, they can actually show us ultimately how repairs and maintenance, like whatever needs to be done. But I think as Grant mentioned earlier, it also comes down to the tech that you have. You need to have a really streamlined onboarding process, not only for your investor clients, but also for your tenants. So, for example, one of the things that we do very differently is whenever we have a new tenancy commencing, whether it's $400 a week or $5,000 a week, because we manage property in that range, we meet every single tenancy tenant on site the day their lease starts, and we take them through how to use everything, including the software, how to report repairs and maintenance. So it actually makes our property managers lives that little bit easier. But tenants love it because they can also see in the portal at what stage their repair and maintenance item is at. And it's easy for us to be able to give our tradies all of the information that they need.
Speaker B
It's a simplification of the process. Now, I think we've probably got time for just one last question, and this one is to row. If you have a tenant whose rental payments are perhaps irregular, not that they're underpaying, but they might have different sizes at different times. How does manage reconcile that?
Speaker A
It's a good question. Trust accounting Land was always like, you get the stress of an owner. If someone's meant to pay $500 every week and the tenant pays 200, the trust accountant would just go, well, I'll give you an effective date. And then chase the tenant up with our platform. And then you get all these really crazy messy ledgers. You go to tribunal and it looks messy. Our platform is very simple. It's based on what your tenancy agreement states. You pay X amount in this frequency, you fund your wallet and if you have $10 short, it will do what it's meant to do, which is send them an arrears letter to say after day three that you're in arrears. They log in, can visibly see that they have 10, $10 short, fund it. We process that rental payment and it's a very technical difference. Like, you know, if you sent that money into a trust account, effectively the money's in that trust account, you need to reconcile it. Within our platform, it's actually in a virtual bank account that that tenant owns. You haven't, you don't have access to that money, so you can't reconcile. So they are in arrears and it.
Speaker C
Simplifies it for a tenant too. So if you've got like multiple tenants that form part of that tenancy, they can all deploy, deposit the funds into one account and rather than trying to figure out which tenant hasn't paid, it will literally make it.
Speaker D
It's transparent. It's the bottom line.
Speaker B
And if you do overpay it, it sits there as a credit in the account.
Speaker E
They can withdraw again or they can.
Speaker D
Leave it there until the next rent's due.
Speaker C
Correct.
Speaker B
Now, team, I think that is all we have time for today. We've had a lot of questions come through from the audience. Now I'm going to give you all the opportunity, if any of our listeners want to reach out, how they can best contact you, starting with Ash.
Speaker C
Yeah, sure. So we're quite active on social, so you're welcome to go onto our social media platform or feel free to just call me or email. I'm pretty old school like that.
Speaker B
That is old school. Wanloin. No, no, okay. Not that old school. Alex.
Speaker D
Through the platform. Yeah. So through Manage, you can contact myself and I would say probably the same with you, Ro, but you can probably be more. You're being a technical guy. It's probably good for people to reach out to you directly.
Speaker A
Yeah, sure. Like my email, rohith@managedapp.com.au that I use. Send me an email. Happy to jump in and give you any assistance.
Speaker B
Yeah, fantastic.
Speaker E
Brent, Email.
Speaker A
Yeah.
Speaker E
Or we could Instagram as well, but email's probably the best.
Speaker B
Yeah, fantastic. I'm going to volunteer you all. If anyone does have any more questions about today's masterclass to jump online, shoot you a message. Also for myself, liam.garmen@momentummedia.com if you do have any questions about anything that we spoke about today, do reach out and we'll be able to cover it in a future podcast or future articles here on reb. But that is all we have time for today. Thank you so much for joining us on the masterclass. And until next time, bye bye.
