With an inimitable and lengthy list of accolades achieved during his 23 years in the retail sector, and more specifically Target Australia Pty Ltd, the management rights industry is fortunate that when the time came for Danny Little, director of MRAS Consulting, to cast around for a new challenge, he chose the property sector.
Danny’s extraordinary experience in the management rights industry spans a further 20 years and includes the ownership and operation of Chevron Palms Apartments, Aussie Resort Apartments and Pacific Place Apartments on the Gold Coast before pursuing the corporate letting business in Brisbane between 2004 and 2007.
During this period Danny went into partnership to purchase the Central Brunswick Apartment Hotel, the FV4006 Apartments and the Story Apartments, where he worked closely with the developer on all aspects of the set up.
During this period of record industry expansion, Danny recognised the growing need for hands-on training for new managers so started a consulting service with a strong focus on providing practical assistance on how to improve things at an operational level.
“The handover or induction of new managers into management rights has always been relatively unstructured and often the origin of misunderstanding and issues,“ says Danny. “A number of factors need to be considered; you may have a poor manager exiting that passes on bad habits, or have a good manager leaving who is simply a poor trainer. Either way, the incoming manager is often left unprepared.
“There are many companies that offer training to assist new managers,” says Danny. “Ours provides specific on the job training that deals with all the day to day challenges facing managers. Much of the training is based around developing systems and relationship management with all stakeholders”
Between 2008 and 2010, Danny went on to purchase Aqua Vista Apartments on the Sunshine Coast, Mango Lagoon Resort in Palm Cove, the Whitsunday Reflections in Airlie Beach and Shafston University Accommodation in Brisbane, as well as assisting in a number of joint venture purchases on several other hotel businesses.
As with many of his other investments, Danny improved the profitability of these businesses.
Over the next seven years Danny transitioned from onsite manager to full time consultant, and in 2010 MRAS Consulting was formalised. The original face-to-face assistance developed into a full suite of services including caretaker training, common property assessments and performance reviews, remuneration assessments, mediation and facilitation.
During this time Danny also established Bluechip Resorts and Hotels, and in addition to working with a number of developers on multiple projects, he served as a member of an industry steering committee providing recommendations on legislation for the hotel apartment industry and was appointed industry expert to Strata Community Association, the Queensland Law Society and ARAMA to determine remuneration disputes.
In his role of consulting on new development operation and planning, Danny is increasingly being called upon to provide input across the country and overseas, particularly in China and the Philippines.
“It’s interesting to see what is happening in the management rights and accommodation sectors overseas,” says Danny, “The international industry appears to be founded on the Australian system but without the levels of bureaucracy that we deal with here.
“While there has been an increase of disputes in the industry locally, we have always advocated that the solution is based around training, mediation and facilitation between the owners and the managers as opposed to legal action.”
Danny recalls that when he started in the industry there were six body corporate managers, now there are hundreds. “With the growth of the industry, there has also been a change in the role of the body corporate manager.
“Good body corporate managers understand the complexities of facility management and should be able to recognise, and deal with, the issue at hand. As soon as there is a dispute, the building suffers,” adds Danny. “We need to be able to step back from the day to day operation of management rights and make an assessment as to whether we have got a correct balance of protection, process and practicality.
“Committee members are volunteers, and are often placed under pressure to make decisions that significantly affect the scheme so it is important that the onsite manager develop sound relationships with all key parties based on what is ‘best for the building’ and have a thorough knowledge of the building so that they can actively lead and educate.
“Managers need to be proactive about the development, implementation and maintenance of infrastructure checklists and reports in conjunction with the committee,” says Danny, “establish regular meetings and/or discussions and gain acceptance on how you, as a collective, wish to move forward.
“Skills come with time and every building, garden and committee is different. Managers need to develop a collaborative relationship with the committee. It is impossible for all areas of the scheme to be maintained at 100 percent at all times and there will always be some areas requiring attention. A strong working relationship between the manager and the committee allows for a better understanding of the day to day pressures of caretaking.
“Properties are best run by systems, not personalities,” adds Danny.
“Managers spend a lot of money buying into this business. The day they take over the building, is the day they should think about selling it. Every decision they make and every system they put into place to improve efficiency not only results in increased profits but also adds value to the business. Remember the phrase “certainty equals value“.
Over the past 20 years Danny has maintained the same operating philosophy across the 13 buildings that he has been the managing partner or owner of and says: “If we understand what provides us the greatest efficiency in systems and combine this with ensuring the highest standard of communication to all stakeholders then we are well on the way to fulfilling our business ambitions.”
When asked how he sees the industry going forward, Danny says: “I’m a firm advocate of management rights but believe that the current model needs to evolve further. The industry has moved from two and three storey walk ups run by mum and dad operators to a plethora of large high-rises with hundreds of apartments and extensive maintenance/caretaking requirements.
In reality, these buildings should be supported by dedicated asset managers to ensure that the investment is managed and maintained like any business interest. This would include developing, maintaining, upgrading the scheme in the most cost-effective manner while the day-to-day operations are undertaken by the onsite manager.”
Danny goes on to say that one of the most significant short-term improvements to the industry would be to bring all the old agreements into the 21st century, and to improve the clarity of all specific duties in the contracts. Managers and committees are often provided little comfort with the level of specificity, and by doing this it will go a long way to improving relationships, reducing disputes and ensuring all stakeholders understand their role.”
