According to recent research, the shift towards more efficient transaction methods in Australia’s property management industry is accelerating, with 30 percent of agents now contemplating automated payments as a substitute for trust account management.
Property managers are increasingly turning to payment technology, with many options now on the market. These solutions typically fall into two categories: those that help manage trust accounts and automated direct payment systems that remove the need for trust accounts to process rent roll transactions.
A recent study titled The Future of Property Management Payments, conducted by Agile Market Intelligence in November, aimed to evaluate the adoption of trust account payment alternatives and understand the attitudes of property managers toward the growing trend of automated direct payment systems.
The report’s findings indicate that 10 percent of the industry has already transitioned to automated direct payments for rent roll management, with a further 33 percent of agencies considering switching from trust accounts to alternative payment platforms. In addition, 30 percent of respondents stated they would operate their business without a trust account if starting from scratch.
Michael Johnson, director of Agile Market Intelligence, noted the significant shift in property managers’ perceptions of payment technologies within the real estate sector.
According to Michael Johnson, over 70% of property managers are exploring alternatives to traditional trust accounts for managing rent roll payments. This surge in interest underscores the rapid adoption of innovative payment technologies that have emerged in recent years. Notably, 10% of agencies have already transitioned away from trust accounts for their rent roll operations, and a significant portion are actively evaluating alternative solutions. This trend signifies a substantial shift within the real estate sector.
The demand for advanced payment technologies within the property management sector is rapidly escalating. The impending implementation of stricter anti-money laundering regulations, coupled with ongoing concerns about the security and ethical handling of funds within traditional trust accounts, is driving real estate agencies to actively explore and assess alternative payment solutions.
The clear efficiency benefit that automated payments offer over trust accounts is another significant factor accelerating the transition within the industry.
Agencies leveraging automated payment platforms experience a dramatic reduction in the time dedicated to managing transactions compared to those reliant on traditional trust accounts. Notably, 46% of agencies utilizing automated systems report spending only a few hours or less each month on transaction management.
Johnson highlighted that the increasing interest in automated payments is largely driven by the efficiency gains they offer. He shared that 42 percent of agencies managing between 500 and 1,000 properties are considering switching from trust accounts to automated direct payments, recognizing the operational improvements such a move could bring.
Despite this, Johnson noted that the majority of property managers will continue to rely on trust accounts to manage payments. He explained that many property managers are still uncertain about the workings of automated payment platforms and their potential benefits.
He pointed out that until property managers gain more clarity on how automated payments work and the benefits they offer, most will likely stick with trust accounts as their preferred payment method.
Despite the increasing awareness of alternatives to trust accounts, 43 percent of property managers still have concerns about the compliance of automated payment platforms. Additionally, 26 percent are unclear about how these systems function in managing rent roll payments, according to Johnson.
