IS THIS THE FUTURE OF MANAGING YOUR PROPERTIES?
The product is built to give people transparency and to give them a choice around how they pay their rent, you make it all visible. This is not a problem anymore. Like you can say to a renter, I want to let you know that with Ailo, I can see when you’ve paid the rent, obviously you can see when you’ve paid the rent and the investor can see when you’ve paid the rent. So I can’t cover for you anymore. Again, shifting all of that responsibility away from our shoulders, right back onto the tenant where it should be. AILO is a groundbreaking business operating system for property managers that handles payments, solves communication, helps coordinate your work and provides a better experience for everyone involved.
TELL US A LITTLE BIT ABOUT YOURSELF AND HOW YOU GOT STARTED IN THIS BUSINESS?
“I have been in property management going on 24 years. I started like most of us on the front desk in a little agency while I was doing my diploma in real estate. Which seems like a lifetime ago. Back when I started, we didn’t even take photos in inspections. We were cutting out the ads in the newspaper and charging each week and you had no idea what properties rented for unless you knew there was no such thing as as online databases. Like RPI data and Price Finder was a very different time. The industry has come a long way, not nearly far enough, I think. But through my career I’ve worked for small agencies, big agencies, worked for myself, contracted for other agencies right up until I came on board with AILO almost two years ago now.”
TELL ME ABOUT ALO’S STORY AND HOW IT STARTED AND WHO IS BEHIND ALO?
“AILO started in 2017 and our two co-founders and CEOs, Ashley Renner who came from a payments background, he’s been through several successful companies around the payments flow and banking was part of the setup of deft from a MacQuarrie bank originally. So strong banking background and Ben White, obviously part of the Ray White family and his entire career really has been devoted to property management and how to support agents, do a better job, grow profitable rent roles, support teams. So the two of them together have been working tirelessly to create something better for all the people involved in the world of property management. And really it started with a surveying function called AILO Insights. I don’t know if you’ve ever heard of that, although it is quite incredible what they did. Surveying investors all around Australia, hundreds, and thousands of them trying to establish what property managers were doing well, where they needed to improve. They also had a whole range of algorithms around identifying risk in a portfolio. Flagging this person may have spent a lot of money or had along vacancies, had a low score on the surveying and sort of putting that together in a platform that allowed business owners to see what was going on in their business, property managers to get feedback on the service they were delivering. And also had business development tools in there and a few things. But essentially what they figured out was we can’t solve the industry’s problems by just another slap on product doesn’t work. We are losing property managers in the industry daily. It’s harder and harder to get the right team together. The culture’s suffering. I mean, covid in itself, we lost a huge amount of talent in our industry and really they came to the conclusion that to get this right for people to have strong businesses and people to have established careers and not burn out, we needed to create something from the ground up, which they’ve done.”
TALK TO ME ABOUT SOME OF THE BIGGEST PROBLEMS THAT YOU ARE CURRENLTY SOLVING IN THE INDUSTRY?
“I think when I talk about other software’s being slapped on around this traditional method where the trust account sits in the middle and then all of the other workers kind of tacked on, what that does is push property managers kind of into a corner and say, you now have to make a compromise. It’s your sanity, it’s your time, it’s the customer service, it’s the communication because the way we work, we’ve got all these sort of workarounds to fix the problems. And when you take money flow and you use, technology that is in every other industry, just not until now, not in property management and you apply that to the way we work, you start to change the way property managers look and feel about their career and how they work day to day. So a really good example of that would be by getting in the morning as a property manager and I open my inbox, I’m stuck in there probably till 11:00 AM unless I’m really disciplined. Whereas property managers in AILO get in and they open what we call projects, which is all of their workflow with all the communication integrated into it, all the information about money in real time. So I don’t know if they’ve got a tenant that’s in arrears and they ring up that tenant and the tenant says, I paid it yesterday. They can say, no you didn’t. I can see the minute you press paid and you didn’t pay yesterday, why don’t you open the app on your phone and make that payment? So it just puts them back in that position of power. If I think back to when I started, I knew if a tenant paid rent because they came in and they paid it like it was that right. So, it puts PMs back in that position of power and from that elevation, it is like a domino effect. It changes everything we do. It’s quite phenomenal. Like arrears for alo agents aren’t even a thing anymore because of that exact shift in power then I’m doing it. So, agents that were at 17% or 18% arrears are at less than 1%. Now we all know you apply the effort and the energy; you’ll get your arrears down. But these guys aren’t doing anything. They’re not on the phone, they’re not sending emails, they’re not following it up. It’s just not a thing anymore because you know, the product’s built for, if you give people transparency and you give them a choice around how they pay their rent, you make it all visible. This is not a problem anymore. You can say to a renter, I want to let you know that with Alo I can see when you’ve paid the rent, obviously you can see when you’ve paid the rent and the investor can see when you’ve paid the rent. So I can’t cover for you anymore. Again, shifting all of that responsibility away from our shoulders right back onto the tenant where it should be like we’re, I don’t know, I feel like I work up after 20 years and where all the guardian of everyone else’s bad behavior and it really changes that.”
WHAT ARE SOME OF THE SOLUTIONS THAT ALO OFFERS IN YOUR PRODUCT?
“Literally everything a property manager does, whether they’re end-to-end portfolio manager, BDM leasing, literally every person in an agency has a lift in their day-to-day work life and what they can actually present client facing. So even in leasing, you know, paying a holding deposit or an initial payment depending on what state you’re in, the minute they pay it, you see it. So there’s no delay. Do we open it? Do we not? Do we like what are we doing? Do we tell the investor that gets tidied up? BDMs are having unbelievable success in gaining new managements at warp speed. Even people that are scheduled to go live say in three weeks. I spoke to someone the other day, they get four new managements they onboarded the week before just by talking about what Ailo’s going to give their investors. They can get their rent faster, they can pay their bills however they want. It is all in their statement. I find, talking to people that are using this product is like the most fulfilling part of my job because they’re getting wins that we knew would happen when you build a product like this. But to hear it happening before they’ve even onboarded is incredible. Some agencies race to the bottom with the fees or so-and-so will do it for 4%, why don’t you do that? Not only are they not getting engaged in dropping their fees, some of them are actually increasing their fees. I’m saying, well I’m the only one on the market that’s offering you this and it’s pretty valuable so we’re an extra percent or whatever it is. I’m higher letting fees, whatever it is. There’s people posting on social media about securing tenants faster at higher rents because AILO makes it easier. I think probably the key one is when you take trust accounting out of the center of what we do as property managers and you put communication in the middle of it is really what it should be, right? Because it’s about relationships. That’s really what we are here for. And like you said, no one enjoys making arrears calls. We’re not equipped to be honest, like what are we project managers, we’re counselors, we’re accountants, all the things that you just sort of throwing into. But when you take away the money side and it’s automated in a sensible way, not a ridiculous way and it’s taken care of itself and people have choice and transparency and visibility and they can manage their money in a sensible way and you put communication in the middle, what happens is you actually add significantly more value. So not because you didn’t want to add the value before, but you just didn’t have the bandwidth. There is only so many hours in a day. So that now when something does go wrong, they can jump straight into it and solve a problem without having to worry about the nuanced details around, whether they’re receding or who’s going to pay the bill or we don’t have the funds so they can actually act in the best interest of everyone involved. And everyone gets a lift. Even the tradespeople, the suppliers are getting paid faster than ever. They get paid every day as the money’s there, as the bill falls due, whether there is rent coming in or not. An investor can jump in and pay a bill with a credit card, debit card, direct debit. So even they’re having a lift, you don’t have to worry about, we kind of protect our tradespeople in trades of getting work done and making sure they get paid. A lot of that gets solved too.”
WHAT ARE THE REQUIREMENTS WITH TRUST ACCOUNTING AND HOW THE ACTUAL PAYMENT GATE WORKS?
We have all heard about trustless agencies for so long. There’s a couple of things that I should point out. AILO actually offers both. So when you kind of zoom right out and look at the whole country, not everybody is having their bond lodgments paid directly to the bond authority. So New South Wales and Queensland can and that’s great. So there’s no reason to take a bond lodgment for other states. They still need the trust account to manage those incoming funds and then lodging them obviously. But we’ve recognized that you might have some renters that are particularly sticky to the trust account. So when you change a payment method, it’s about 80% of the tenants will follow your lead. Yep, you’ve asked me to make a change, I’ll do that. There’s a whole range of options, some attractive fee, some don’t. 10% generally move across in another two weeks. And then you have a handful of people that are quite sticky to the trust account. So we want to make sure you can still take the rent for those renters for the whole lifecycle of their tenancy. It’s no issue. So we’ve built an entire trust accounting module inside of also so you can still receive the rent and do your bank crack. And then what’s really great about it is AILO will then pull those funds out of your trust account and over into the investor’s AILO wallet. So your investor still gets all the benefits irrespective of how the tenants paid. So, they can get paid the minute it clears, they can pay their bills with credit card, debit card and so on. But as an agency you get a significant lift because you’re not having to receipt most of your payments. It’s all coming through AILO without you doing anything. But you can still handle those sort of edge cases where they’re a little bit stickier to the trust account. So there are agents using AILO today obviously in the states that don’t require to lodge bond through their trust account that have no activity in their trust account. It’s just sitting there with a zero balance, which is fine. Now if they go through a 12 month period with no activity, they don’t need to have it audited. The agencies that have, a trickle through, I don’t know, 5% or what whatever the number is of people still paying into the trust, they are still required to get it audited, but it’s significantly faster and more cost effective. Most of them are having a minimum charge from their accountant to have it audited, which is good news because that saves us money. What we say is keep the trust account open, sitting there dormant, whether it’s a small amount of funds going through it or zero funds, just keep it sitting there. We don’t ever want any agency to have to turn away a tenant if they turn up at your door desperate to pay the rent so that they’re not terminated. We want you to be able to take those funds. It’s a whole range of options to make that easy for them. But effectively we meet the need for any scenario is probably the most important thing to say. But also reducing the costs for an agency. I did a huge amount of work around modeling, cost benefit analysis last year for this. And most agencies are paying between 67 cents and 88 cents for every outbound payment from their trust account. So yeah, it’s crazy. Water rates, council rates, strata levies, insurance, land tax, all the things that we pay, you pay by bpay, you are paying for that every time. So, the bank fees in us operating a trust account are going up and the banks are benefiting, but we’re not getting a huge lift really, but we’re paying handsomely for it. So, you cut out all those expenses with Ailo”