In case you missed the big announcement last year, Property Management company :Different declared a $25 million dollar joint venture partnership with the Commonwealth Bank of Australia (CBA). Whilst many avid readers of Elite Agent probably saw the announcement I wonder how many real estate business owners actually stopped for a minute and took the time to contemplate what it could and will mean for the traditional Property Management agency.
As an industry consultant and premium outsourcing provider, I have worked with and helped streamline more than 8,000 agencies over the past decade and based on my experience the most affected by this announcement will be the agencies with a rent roll size of between 200 and 400 managements.
These portfolio sizes are the most vulnerable in our industry to be brought out or simply lose market share mostly because they just aren’t big enough to compete. Most have been bootstrapped by the owner meaning they’ve done it tough to get their rent roll secured but the cost and sacrifice on a personal front will have taken a toll. Furthermore, these sized rent rolls are what I call heavy to run. The owner usually still works in the business accompanied by a small team of staff. The staff to Property ratio on average is approximately 1:110 meaning the way they run isn’t streamlined or operating at maximum efficiency. Turnover of staff is still an issue for your clients who, let’s face it, came on board initially because they wanted to deal with the owner and feel that personal touch. Processes are usually clunky and made up of ad hoc tech that’s been introduced over time. But one of the biggest challenges is overcoming the “that’s the way we’ve always done it” mindset.
It’s these sized agencies that I have focused on helping throughout my career and it’s the reason why I started my company PMVA [Property Management Virtual Assistant] to finally give these clients the edge they need to stay in business and compete tapping into large scale services, innovation and custom consulting without the cost. Our three main goals are to improve structure and process, increase profitability and allow clients to remain flexible and light.
So the question this current announcement should have you asking is “How am I going to compete? What do I need to improve and what really needs to change to make my business sustainable during this next evolution of Property Management.”
The announcement also went on to say that they will have access to 15 million CBA investors which makes me think how many of your clients are currently financed through the CBA that will now be introduced to :Different by way of this announcement? It will be the bank’s goal to profit from this new relationship which means not only will you now be competing against large property Management organizations but you’ll also be appraising new and existing business alongside one of Australia’s largest banks.
The truth is if you want to compete with the likes of :Different then you’re going to have to ACT differently. You’re going to need to find an edge, secret weapon or superpower that will give you the flexibility of scale without the price tag that cashed-up, large scale operators have.
