The age-old model of buying a property and giving the keys to a property manager to take care of the place is likely to go as property management is replaced by proptech, according to industry experts.
Speaking to Smart Property Investment as part of this month’s proptech special, Yabonza’s Mark Trowell and Heidi Guenther shared why the outdated model of property management will not survive.
Mr Trowell argued once consumers shift their mentality, the need for locally based property management will disappear.
“One of the shifts you have to get people away from is the mentality of not being local,” Mr Trowell said.
The property manager explained that over 90 per cent of the work that property managers do does not require someone going around to the property.
“You’ve got this huge portion of work that we don’t need to be in the proximity,” Mr Trowell said.
Instead, traditional property management is actually costing investors as “driving past the property to check on repairs and maintenance”, which adds no value to the property owner, “as they don’t know what they are looking at half the time”, Mr Trowell argued.
“It is inefficiency that you’re paying for,” Mr Trowell said.
Rather than paying for a property manager to drive past a place, Ms Guenther argued local data makes it easier than ever to know how much things should cost, even if the investor is not a local.
“[Proptech providers] partner with licensed local agents and tradesmen in your area that will go out to the property if required, not just for the sake of sending them out,” Ms Guenther said.
Mr Trowell said investors should not be be fooled by property managers who promise them the world, despite being able to deliver very little.
“Data is more advanced than a property manager sitting in their office in a local area. Half the time what they will tell you is we can get you another $30 more because, apparently, they have some magic list of tenants that they will always sell you on.
“It’s not a list, it’s differentiating the property in another way to give you a better price. It is data, data tells you everything. How many days on market, where it is, what the street is going for, everything you can find out online.”
Finally, the proptech specialist highlighted the average property manager is not looking at the overall picture when it comes to property.
“He doesn’t look at macro and micro activity. That is going to be a big driver around supply and demand in specific areas and how it is going to impact the market over time.
“Half the time they are running around crazy, doing repair and maintenance stuff, sitting in the car, ringing up tradespeople and doing that sort of stuff instead of having their finger on the pulse and looking at what the data is saying about performance in a particular area,” Mr Trowell said.
He concluded: “The role of a property manager is going to go; in our business, it’s gone.”
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