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What is management rights?
Around fifty years ago, the first management rights (MR) business emerged on the Gold Coast in QLD Australia. Since then, it’s become extremely popular, as it offers the owners of strata buildings (properties that are adjoined, such as apartments or townhouses) great benefits and services.
There are three components to management rights: a manager’s unit, a caretaking agreement and a letting agreement.The onsite manager is also called the resident letting agent and usually owns and lives in the manager’s unit, getting paid a salary to maintain the complex, as well as paid commission to rent out the units. Because they’re not only part owners of the building, but also live and work on the property, the manager is motivated to provide top-notch, value-added services to the body corporate (the collective body of owners within the complex, building owners, residents and guests).
From a business point of view, management rights has a built-in niche, because all the services are located in the one building.
There are three components to management rights: a manager’s unit, a caretaking agreement and a letting agreement.The onsite manager is also called the resident letting agent and usually owns and lives in the manager’s unit, getting paid a salary to maintain the complex, as well as paid commission to rent out the units. Because they’re not only part owners of the building, but also live and work on the property, the manager is motivated to provide top-notch, value-added services to the body corporate (the collective body of owners within the complex, building owners, residents and guests).
From a business point of view, management rights has a built-in niche, because all the services are located in the one building.
How many different types of management rights are there?
SIRE Management Rights mainlysellssix types of management rights, where the duties are specified in the caretaking agreement, and thedifferences are in the letting part of the business:
The best way to understand each style of management rights is to join a SIRE management rights inspection.Please fill in the form on this page to register for an onsite inspection where the SIRE Team and manager will go through all the nuts and bolts with you.
- Permanent management rights
- Holiday management rights
- Mixed management rights
- Student management rights
- Provides accommodation to students. This is for buildings located next to universities and other educational providers.
- Corporate management rights
- Aged care management rights
The best way to understand each style of management rights is to join a SIRE management rights inspection.Please fill in the form on this page to register for an onsite inspection where the SIRE Team and manager will go through all the nuts and bolts with you.
What are the income streams for management rights owners?
There are many sources of income for the management right owner, with the two major ones being thebody corporate salary and letting commissions/fees.
A body corporate salary applies to all different types of management rights. Within the caretaking agreement, there’s a specified annually increasing amount of remuneration for theduties performed to maintain the common area and facilities.
Management rights owners also offer letting services to investor owners. For this they receive a letting fee, which is a one-off payment made at the start of a new tenancy agreement. It usually comes out of the first rent payment and covers the cost of advertising the property and setting up the tenancy agreement with the new tenant.In addition, they receive a letting commission, which is ongoing.
For different typesof management rights, there are many other sources of income, such as providing repair and maintenance services for the owners, cleaning services for the residences and commissions received from touring companies. For strata hotels and motels with restaurants and bars, income can be generated from these sources as well.Over the years,we’ve compiled a list of over twenty ways management rights insiders canincrease their income.
A body corporate salary applies to all different types of management rights. Within the caretaking agreement, there’s a specified annually increasing amount of remuneration for theduties performed to maintain the common area and facilities.
Management rights owners also offer letting services to investor owners. For this they receive a letting fee, which is a one-off payment made at the start of a new tenancy agreement. It usually comes out of the first rent payment and covers the cost of advertising the property and setting up the tenancy agreement with the new tenant.In addition, they receive a letting commission, which is ongoing.
For different typesof management rights, there are many other sources of income, such as providing repair and maintenance services for the owners, cleaning services for the residences and commissions received from touring companies. For strata hotels and motels with restaurants and bars, income can be generated from these sources as well.Over the years,we’ve compiled a list of over twenty ways management rights insiders canincrease their income.
What are some of the reasons people buy management rights?
Here are some of the responses I’ve received when I ask people why they buy management rights:
What they find is that management rights is the only business that ticks all the boxes for them
- I’m planning on having baby this year, and I want to work from home and look after my family.
- I was just made redundant and want to be my own boss this time around.
- I want to work my own hours.
- I need a stable income.
- I want a low-risk business.
- I’d like to invest in something that has an established, time-tested business model
- I’m looking for a business that provides the highest leverage using the bank’smoney.
- I’m interested in a business that’s easy to operate
- I want a business that has a clear, easy and profitable exit strategy
What they find is that management rights is the only business that ticks all the boxes for them
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