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So you are looking for Management Rights for Sale?
‘Management rights’ is the industry name for a business arrangement between resident managers of strata titled properties (complexes comprised of units owned by different entities) and a property developer or body corporate made up of unit owners.
Two agreements are key to owning management rights:
- A ‘caretaking agreement’ permits a manager (or managers, often a couple) to live in one unit onsite and take care of common areas within the complex, such as swimming pools, tennis courts, stairs, the car park, etc. A base salary and list of responsibilities are included in this agreement with the body corporate.
At the moment, we have an abundance of listings around Brisbane.
- A ‘letting agreement’ with the body corporate gives a resident manager exclusive rights to let out units in the complex on a commission basis. The nature of commission is often negotiated with each unit owner.
- Management rights owners always reside onsite but the nature of their accommodation fluctuates depending on the complex. Some properties offer resident managers a one-bedroom unit and office for day-to-day operations; others may offer a luxury penthouse suite and private elevator.
Each management rights agreement is as unique as its property.
How long will you have the management rights?
There are some differences state-to-state, across the board. In NSW, there tends to be a 10-year maximum, with the exception of agreements made before 2003. In QLD, the term length depends on which regulation module governs the scheme; standard modules work a maximum of ten years while the accommodation module operates up-to 25 years.
Click here for current Management Rights valuation information.
A Management Rights owner/s will:
- Be paid an agreed amount from the Body Corporate to provide the caretaking services as set out in the Caretakers Agreement
- Be paid an agreed percentage for providing letting services on behalf of unit owners/investors in the building.
- Earn commission for Unit Sales on behalf of unit owners/investors in the building.
- Earn commission for services provided to short stay guests such as booked tours.
- Earn a profit when providing additional maintenance or extra cleaning for unit owners.
Expect to invest over $1 million, with some management rights business opportunities costing over $7 million.
Remember with Management Rights you are generally not just buying a business, you are also purchasing an apartment - an appreciating asset.
Oftentimes the cost of a Management Rights business is calculated as a multiple of its income-generation potential or Net Profit
- Make sure that your accounts and records for the last 5 years have been completed and are up to date.
- Consider obtaining approval from the Body Corporate to extend your management rights agreement.
- Present the Unit is good repair.
- Select a Management Rights specialist Agency to sell your business.
- Advertise your Management Rights business for sale on a specialist website accomproperties.com.au
