If you missed the big announcement last week, property management company :Different declared a $25 million strategic partnership with the Commonwealth Bank of Australia (CBA).
While many avid readers of Elite Agent probably saw the announcement, I wonder how many real estate business owners actually stopped 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 8000 agencies over the past decade.
It’s with this experience in mind that I believe agencies with a rent roll of between 200 and 400 managements will be most affected by this partnership.
Portfolios of this size are the most vulnerable in our industry and are either frequently bought out or susceptible to losing market share.
Most have been bootstrapped by the owner, which means they’ve done the hard yards to secure the rent roll but at a high personal cost and sacrifice.
On average, the staff-to-property ratio is about 1:110, which means they don’t run in a streamlined fashion, or operate at maximum efficiency.
Staff turnover is often an issue for clients, who originally came onboard because they wanted to deal with the business owner and feel like they’re more than just a number.
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.
Helping agencies of this size is the reason I started PMVA (Property Management Virtual Assistant), with the goal of helping them gain the edge they need to stay in business and compete, while 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 :Different will have access to CBA’s 15 million customer base, which should prompt you to wonder how many of your clients are financed through the CBA and will now be introduced to :Different?
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 organisations, but you’ll also be appraising new and existing business alongside one of Australia’s largest banks.
I know from experience that small to medium agencies make up the majority in our marketplace. But I also know that with a little push in the right direction, the can compete with larger operators.
They just have to be willing to switch their focus to a more client centric model.
The truth is, if you want to compete with the likes of :Different you’re going to have to act differently.
You’re going to need to find an edge, a secret weapon or a super power that will give you flexibility of scale without the price tag that cashed-up, large scale operators have.
