Don’t let the hunt for a resort broker break you! Here’s our cheat-sheet:
It’s a dog-eat-dog world out there for a potential buyer. Everywhere you look and everywhere you go, it seems like there’s a salesperson ready and waiting to pounce.
But I just want some information about management rights, you might find yourself thinking. I’m just looking for a resort broker, or someone to discuss my options with me. That’s why the first obstacle in any new journey is finding out what you don’t know. Once you’ve worked that out, you can get things moving.
If you’re brand-new to the industry or have never owned management rights before, it’s easy to find yourself talking to lots of apparent ‘experts’ who offer you conflicting advice. Whether it’s a bank lender, another manager, a salesperson or someone else; your best bet is always to make sure your first port of call is someone who specialises in management rights. Ideally, you should discuss management rights with someone who has actually owned management rights before. This is where specialised industry brokers come in handy.
Across Australia, resort brokers arrange and/or negotiate the buying and selling of management rights. Perhaps more articulately: brokers match prospective managers with the properties to which they are best suited.
You might start out with a dream of managing a traditional holiday resort with high profit potential and enviable facilities. However, a well-informed broker might tell you that busy holiday complexes come with lots of hands-on demands and a near 24/7 work-life that won’t suit your post-retirement lifestyle ambition. The broker might suggest a permanent rental complex that offers a much less time-consuming gig. Corporate, mixed and student building are other options to discuss.
The point here is that each type of accom property has different pros and cons; whether one type will suit you more than another depends on your life-story and life goals. Brokers help you to figure out which type of management rights agreement has the longest pros list for you.
Are you confused about what you might want in a management rights agreement? Like we said, the most important step is knowing what you don’t know. Draw up a list of questions you’ve been asking yourself. Be honest.
Money. Ask your broker about the financial aspect of management rights. Tell them your budget. Tell them much profit you need to be making, or how critical the return on investment is to you. This will help your broker explain the differences between resorts, permanent complexes, and other types of management rights. It will also help them in their search for a property agreement that will suit you and your needs.
Involvement. It’s something of a lifestyle choice and something of a gamble but how much involvement do you want to have in your management rights business? The number of units on the site will have a big impact on this but there are many other factors. A specialised resort broker will talk to you about the marketing demands of a particularly sized resort or holiday complex. Guest demographic also plays a role, whether corporate or family-oriented.
Duties. Do you enjoy gardening and/or maintenance? If not, this is something to factor into the discussion with your new broker. Different aspects of managing a property should all fall onto the pro/con list somewhere. In a permanent complex, for example, you would be able to charge tenants cleaning fees whereas organised housekeeping is a necessity for a mixed or holiday complex. How many departmental duties you are able to take on as new management rights owners (admin, housekeeping, food and beverage, property maintenance, etc.) will hugely impact the decision-making process.
Location. This is an obvious talking point for your initial conversation with any new broker. Where would you like to purchase management rights? This is an area of discussion that a broker will be extremely well-versed in, so ask them about their previous sales and which areas they themselves are interested in, and why. What’s the benefit of regional over beachfront, or lakeside over rainforest? There are so many regions around Australia to choose from, many that you might not have even heard about, so take your time with this one. Keep an open mind and ask your broker for suggestions on where to have a look.