As published in the April Issue of Resort News. Click here to read the supplement online.

Off-the-plan (OTP) management rights sit in a unique corner of our industry. They’re often positioned as an entry point or a value play, but in reality, they’re something quite different: a business build, backed by a development.

That distinction matters.

Having worked across these transactions as both a broker and operator, the buyers who achieve the best outcomes are those who understand this early. They approach it as an opportunity to build a business from the ground up, with the right structure and protections in place.

When you buy off-the-plan, you’re committing to a future income stream rather than a proven one. The transaction is typically agreed with the developer well before completion, with pricing based on projected income rather than historical performance. That places a premium on understanding how the deal is structured and how those projections are built.

The upside is what makes OTP compelling. Unlike established management rights, where you inherit existing systems and constraints, OTP gives you the ability to influence how the business is set up from day one. If you engage early, you can materially influence layout, operations, systems and even how the letting pool is built. With that opportunity comes a different risk profile. The letting pool isn’t fixed. The investor mix isn’t final. Rental performance is based on forward assumptions. That’s why discipline, structure, and the right advice are critical.

With that in mind, these are the areas I’d be focusing on when assessing an OTP opportunity.

Tip #1: Understand and validate the income projections

Income projections are central to any OTP transaction. Typically prepared by specialist industry accountants or experienced brokers, they are based on comparable assets, market evidence, third-party rental projections, presale-investor versus owner-occupier mix and achievable operating assumptions.

When properly prepared, these figures are not arbitrary; they reflect what a well-run business should be capable of delivering. That said, they remain projections.

As a buyer, you should:

Understand the key assumptions (letting pool estimates, occupancy, rental appraisals).

Ensure they align with current market conditions and comparable sales.

Have your own accountant independently review the figures.

The objective isn’t to challenge the numbers unnecessarily, but to fully understand what drives them. If the assumptions are sound, and in most well-structured deals they are, you can proceed with confidence that the income is both realistic and achievable.

Your broker should be able to break these projections down, explain the process in detail, and walk you through the numbers so you are comfortable with them.

A common misconception is that OTP represents a “cheaper” way to buy. In reality, you’re buying earlier in the lifecycle and taking on a letting pool that you have to secure, rather than inherit as part of the purchase.

OTP assets generally transact at a slightly softer multiplier than established complexes, reflecting the fact that the income needs to be built. The trade-off is that you’re the one creating that value over time.

Tip #2: The letting pool is everything

The letting pool is the single biggest driver of performance, and in OTP, it’s not guaranteed.

Each individual owner decides how their property is managed. Your ability to secure and retain those appointments will determine how the business performs.

Strong operators take a proactive approach:

Engaging early with developers and project marketers.

Understanding the likely buyer profile.

Positioning themselves as the preferred letting agent from day one.

If you wait until settlement to build those relationships, you’re already behind.

Tip #3: Get the agreements right (non-negotiable)

In management rights, the agreements are the asset.

OTP transactions are not based on standard contracts. Each deal is bespoke, which means the detail matters.

Your agreements must clearly define:

Caretaking duties and scope.

Letting rights and authority.

Term and extension options.

Remuneration structure and increases.

This is not an area to compromise. Specialist legal and advisory input is essential. Poorly drafted agreements can impact finance, reduce value, and create long-term operational issues.

Tip #4: Build in protection (sunsets and structure)

Development risk is real. Timelines shift, staging changes, and not every project proceeds as originally planned.

That’s why contractual protection is critical, particularly sunset clauses.

You should clarify:

Delivery timeframes.

Exit rights if timelines aren’t met.

Protection across staged developments.

Equally important are claw-back and claw-forward provisions, which ensure the final purchase price reflects the actual letting pool delivered. Well-structured contracts protect both sides and give you certainty as the project evolves.

Tip #5: Understand the finance reality

While lenders are generally supportive of management rights, OTP transactions are assessed as start-ups.

In practical terms, this means:

Check lending LVRs with experienced MR finance brokers.

Greater emphasis on your experience and capability.

Additional requirements may apply such as bank guarantees or funds held in trust for future adjustments.

You also need to account for GST, equity contributions, and working capital during the lease-up phase.

The right finance structure is critical. Done well, it gives you flexibility. Done poorly, it creates unnecessary pressure from day one. Speak to finance experts in the OTP space. They are the experts for a reason.

Tip #6: Treat the developer meeting like a job interview

In OTP transactions, the developer is effectively selecting an operator, not just selling a business.

You are being assessed on your ability to:

Lease the building efficiently,

Maintain the standard of the asset,

Enhance the overall value of the development.

The strongest buyers come prepared, with a clear plan and a strong understanding of the asset. That preparation not only improves your chances but can strengthen your position in negotiations.

Tip #7: Understand how you get paid

Income in management rights typically comes from two sources:

Body corporate remuneration (caretaking salary).

Letting and management income.

In OTP deals, the salary is defined upfront in the body corporate budgets that form part of the lot owners’ disclosure documents. The letting income is where the upside sits but it’s also where performance matters most.

Tip #8: Be ready to build the business and defend it!

OTP management rights are not passive. The first six to 12 months post-settlement are critical.

You’ll be:

Leasing up a significant volume of stock.

Establishing systems and processes.

Building relationships with owners.

Delivering service from day one.

Under pressure from external agents targeting your complex for sales and rentals.

This is where experienced operators stand apart. You’re not stepping into a finished business; you’re building one. From day one (and even before settlement), external agents will be looking to capture opportunities from your investment. Having a system in place to secure reliable referrals from investor buyers to your management business is not optional; it should form part of your business plan.

Property prices, rental pressure and government incentives have seen an influx of owner-occupiers into the market. Ensure you are the preferred property manager when they consider a shift to investment letting or when they decide to sell.

The managers who build the strongest businesses in year one are those who treat defence, growth, and new revenue streams as equal priorities from the day contracts are signed, not as afterthoughts once the pressure arrives.

OTP management rights remain one of the most compelling opportunities in the accommodation sector when approached correctly, offering entry at an earlier stage of the asset lifecycle, the ability to shape the business and strong long-term upside.

This is why it needs to be approached in a structured way: as a business backed by a development. With the right mindset, skill set and people around you, it can be a highly rewarding investment.

Ras360 is a leading OTP Management Rights brokerage, with a specialised residential sales division that helps managers defend, build and reward their business.