Resort News attended the 2018 Australian Resident Accommodation Managers Association (ARAMA) industry expo events held in Brisbane, Gold Coast and Sunshine Coast during July. This popular annual event brought together ARAMA’s industry partners, professionals, service providers and suppliers, plus key government and tourist bodies and resort managers.
ARAMA successfully created a relaxed space at Ramada Hotel and Conference Centre, Marcoola Beach, for networking with drinks and snacks and offering the chance to win some great prizes. The friendly and lively event was the perfect place for Resort News to have face-to-face catch ups with many old and new readers and report on the top tips from experts in attendance.
CEO Trevor Rawnsley took the opportunity to remind members about the May 2018 launch of the 12-month Fast $50 campaign, open to all ARAMA members who fancy earning a fast $50 whenever they introduce a new member. He also announced the exciting ARAMA Rewards and Recognition Program, sponsored by Accom Properties – the prospect of winning one of two $5000 international holiday vouchers – which should certainly create some healthy competition over the coming year!
One prize will be for ARAMA members who are the MLR sales brokers that sell the greatest number of new ARAMA memberships, and the other prize for all other ARAMA members who sell the most new ARAMA memberships.
Trevor also introduced his expert panel: “This year, the focus for the event will be The Good, the Bad and the Ugly of living, working and investing in community titles schemes in Queensland.” The Sunshine Coast event panel included Tony Rossiter (Holmans), Chris Traill (EBM), Steve Austin (Suncorp Business Banking), Glenn Millar (Resort Brokers) Management Rights Sales Broker as well as Michael Kleinschmidt (Stratum Legal)
The main takeaways from the panel
Tony Rossiter from Holmans
Tony discussed an important new issue to the industry: clawback clauses. He said: “Over 20 percent of MR contracts now have a financial clawback built in – a protection for the buyer if a unit is lost from the letting pool during the settlement process.”
Tony also talked about the impact of the recent rise in owner occupiers on a MR business. He stressed the importance of a manager’s involvement in the unit sales process to ensure the rental pool remains buoyant. He said: “When you are involved in the sales process, my top tip is to take the commission earned from the sale and pay it off your debt.”
He also reminded managers about a big challenge from banks not just “rolling on” interest rates and the impact this may have on the bottom line. He said: “Beware of your loan agreement and be prepared for renegotiations.”
Steve Austin from Suncorp
The scrutiny from the Banking Royal Commission on banks and the resulting difficulties of acquiring finance for management rights has been long discussed. However, Steve stressed that banks have been lending to the MR industry for over seven decades and the business is still seen in very favourable terms. The main change to now be aware of is “where banks have always looked at banking risks, they now have a responsibility to assess risks to the borrowers as well, meaning there is a greater requirement for due diligence”.
A Gallery Vie reminder to anyone thinking of selling their business to get proactive about Gallery Vie compliance because it makes it so much easier to sell.
Glenn Millar from Resort Brokers
Described a difficult year where he has seen “a lot of financial knockbacks” with “buyers pre-approved one day but not the next” and banks having a greater focus on cost of living. His tip: “to be more realistic with your cost of living budgeting”.
He stressed that you must stay competitive and get your owners on side to keep units up to standard for greater returns.
On a very positive note he reminded the room that “management rights remain a fabulous model here in Queensland”.
Christopher Traill, executive account manager at EBM
Began by congratulating ARAMA on “providing great support to its members”.
He talked about the importance of identifying risk and putting risk management techniques in place with the rise of litigation especially relating to H&S. However, he also warned of the “rise of bodies corporate litigation with BCs trying to terminate agreements”.
He had good news though: a new insurance product that has been designed specifically to protect managers if they should come up against their BC and he urged everyone to consider this new protection.
Michael Kleinschmidt, from Stratum Legal, started with the “bad” as he was concerned about the fairness of manager’s renumeration. Pay needs to fairly reflect the actual amount of work managers are doing and he suggested that this is not always the case for some managers, especially those who have been in their business for many years.
His “ugly” was to urge managers to know their sinking fund and use it! Because, he joked: “You can’t put lipstick on a pig.”
The “good”? Michael had a few, he considers both Gallery Vie and the clawback clause good for the industry as they provide a safe buffer. The new insurance product from EBM is a “good thing”, he noted, and he praised ARAMA for the “fantastic amount of support it offers its members”.
Michael’s tip: “The owner’s stay is gold, use it to build the relationship and make it count.”
Educating the body corporate
Ways of educating the body corporate and owners about the amount of work that is expected from managers in agreements (especially where expectations have increased over time) and fair pay led to further questions about improving relations and renegotiating agreements. The suggestion that managers should invest in a time and motion study for renegotiation and using a review clause in agreements provided a lively discussion.
The biggest takeaway from the event was a celebration of how great our industry is, filled with great people, exciting opportunities, supportive professionals and shared expertise. This annual event really highlights the benefits of being an ARAMA member and the value of having such a wealth of inside knowledge and rich resources to call upon, not forgetting the wonderful support from other members.