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New research has revealed the true pace of change when it comes to transactions in Australia’s property management industry, with 30 per cent of agents now considering automated payments as an alternative to running a trust account.
The adoption of payments technology is a rapidly rising consideration for property managers. There are now numerous payments applications for property managers to consider, but they essentially fall into two broad categories: payments solutions for trust accounts and automated direct payments that eradicate the need for an agency to run a trust account to manage rent roll transactions.
The Future of Property Management Payments report, conducted by Agile Market Intelligence in November, set out to establish the extent of the adoption of trust account payment alternatives as well as identify the attitudes and preferences of property managers when it comes to new automated direct payments technology.
This groundbreaking new report has revealed that 10 per cent of the industry has already moved to automated direct payments to run rent roll transactions, with one in three agencies considering replacing their trust account with an alternative payments platform. Furthermore, a resounding 30 per cent of respondents said if they started a new business tomorrow, they would do so without a trust account.
According to Agile Market Intelligence director, Michael Johnson, there has been a significant shift in attitudes to real estate payments.
“Considering that over 70 per cent of property managers are now aware that there are alternatives to managing rent roll payments via a trust account, property managers have clearly taken an interest in emerging payments technology that has only really been available for a few years. With one in 10 agencies now running their rent roll without a trust account – and considerably more reviewing the alternatives – a major shift is taking place in the real estate industry,” Johnson said.
The adoption of payments technology is a rapidly rising consideration for property managers. With new anti-money laundering legislation in the pipeline and persistent trust account theft and misappropriation of rental income, real estate agencies are now seriously considering the alternatives.
Another powerful driver of change is the clear efficiency advantage agencies with automated payments have over those that run a trust account.
“Agencies using automated payments platforms spend significantly less time managing transactions than those that use a trust account. In fact, 46 per cent of the automated payments users spend a few hours a month or less managing transactions.
“This is probably one of the key reasons that 42 per cent of the most motivated segment of the market, agencies with 500–1,000 properties under management, are currently considering moving from a trust account to automated direct payments,” Johnson said.
But Johnson pointed out that for the majority of property managers, running a trust account will remain the preferred method to manage payments until there is greater clarity around how payments work.
“There is still a lot of uncertainty around automated payments platforms and what the benefits are for property managers.
“While the majority of the industry is aware that there are alternatives to trust accounts, 43 per cent of property managers are uncertain about the compliance of automated payments platforms, while 26 per cent are unsure about how they work in administering rent roll payments,” he noted.
The full report is available here.
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