Each business will be different with many different variables including the size of the complex, number of units in the letting pool and the duties required by the Caretaking Agreement.


What You Get Paid By The Body Corporate For Caretaking

The range of remuneration depends on the Manager’s duties. It also depends on whether the Agreement is a “do” Agreement or a “supervisory” Agreement. Under a “do” Agreement the manager must undertake all tasks within the complex that a Caretaker/Manager would undertake, down to changing light bulbs and mopping the reception floor. With a “supervisory” Agreement the Manager will do very little and often nothing other than to supervise everyone else who carries out all the caretaking duties within the complex.

The range of remuneration is on average between $800 per lot per annum up to a high of approximately $1,800 per lot per annum and will depend on many factors. The Caretaking Agreement may provide for the Manager’s remuneration to increase annually by a fixed %, the Consumer Price index or provide for whichever is higher.

Importantly, the remuneration from the Body Corporate is secure income; it is paid monthly, in arrears, on a nominated day of the month.

Commissions Paid For The Letting Of Units

On average, the commission on rentals in a permanent let complex is 7-8% while in a holiday let complex the average commission is 12%. Of course, owners do not have to let their units; they can live in them or lock them up. If an owner chooses to use the Manager’s letting services the owner pays commission from the rental collected by the Manager.  You “pay yourself” at the end of each month.

Additional income is obtained from a variety of sources including fees for re-letting units in the case of a permanent let complex, maintenance work (within the individual units), linen hire, cleaning and tour sales in holiday buildings or gardening services for tenants in permanent let complexes.

The number of units in the letting pool, the occupancy rate, the age and condition of the complex will all have a bearing on the income potential from the letting business, as will your ability and desire to offer additional services.

Is There Any Cash?

All income derived from these businesses has a capital value and the business purchase price of the Management Rights sale will be determined by a multiple of net operating profit (currently ranging between 3.5 and 5 times on the Gold Coast). There is therefore no incentive to inaccurately disclose income or pocket any cash received.

Where Does The Money Come From In This Business

In holiday letting businesses, the letting component is usually the greater component of the income, while in permanent complexes it is possible that the caretaking component is the greater.  Each business will be different with many different variables including the size of the complex, number of units in the letting pool and the duties required by the Caretaking Agreement.

As the value of the business component of the Management Rights purchase is determined as a multiple of net profit, there is little incentive to “hide” income and pocket it as cash.

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THE MBA PARTNERSHIP ACCOUNTANTS

Management Rights Accountant

PAUL GAFFNEY | MANAGEMENT RIGHTS

The MBA Partnership is one of the most experienced firms of management rights accountants in Australia. Many of their clients are new to the management rights industry, and with over 30 years experience in management rights they have the expertise to help you set up correctly from the beginning. From due diligence, accounting, taxation and auditing Paul and his team can guide you through the entire process.

Phone: +61 7 5557 8700

LEVEL 3 "PIVOTAL POINT"' 50 MARINE PARADE SOUTHPORT QLD  4215

pgaffney@mbapartnership.com.au | managementrightsaustralia.net 


 

Management Rights & Motel Finance P/L

Mark Ryall

 Mark Ryall | MANAGEMENT RIGHTS

Management Rights and Motel Finance Pty Ltd is an industry leader in providing specialist finance needs to companies and individuals embarking on the purchase of a Management Rights business. Mark and his team is dedicated to helping you with all your management rights and motel finance needs! We work around the clock to make sure you receive the best deals.

Suite 4, Level 2 / 247 Bayview St Hollywell QLD 4216

Phone: 07 55641100 | 0419 640 215
Fax:     07 30140108

mark@mrmfinance.com.au | www.mrmfinance.com.au

Australian Credit Licence No: 378366


 

Management Rights Articles

  • REAL ESTATE AND THE SALEABILITY OF YOUR RIGHTS

    The eastern States have experienced substantial increases in the value of real estate over the last couple of years. This increase in property values, however, is not such a great thing when it comes to selling your management rights.

SMALL MYERS HUGHES LAWYERS

COL MYERS | MANAGEMENT RIGHTS

SMH Lawyers handles all aspects of a Management Rights transaction from establishing, purchasing and selling Management Rights to advising bodies corporate on strata related issues and disputes. Col Myers and his team of experts is constantly exposed to all aspects of the management rights industry which means they can proactively advise when and how to best handle management rights to work effectively for individual scenarios.

Phone: +61 7 5552 6604 | Mobile: +61 417 620 516

Level 2, 17 Welch St Southport Qld, 4215

info@smh.net.au | www.smh.net.au  


 

Management Rights & Resort Specialists

 

 

 

 

is widely recognised as one of the industry’s most experienced and enthusiastic management rights companies specialising primarily in management rights and resorts Australia-wide.

Years of consistent sales have resulted in a highly recognised team. The MR Sales team have the knowledge and ability to liaise with industry professionals from bankers and accountants to lawyers and valuers. This gives MR Sales the knowledge and know-how to assist in determining what sells and why. With over 21 years’ experience in the industry, this team has a great deal of knowledge and experience to bring to the Management Rights seminars.

 

Michael Philpott | National Coverage

Phone: 0433 137 927

michaelphilpott@mrsales.com.au  

https://www.mrsales.com.au

 


 

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