WHAT
IS MANAGEMENT RIGHTS?
If you're looking for a guaranteed salary, plus the
right to earn further commission and services income, a Management
Rights Business may be the way to go. It offers a great life
style, a return on your investment and good resale potential.
It really is the ultimate home business.
What are Management Rights? Management Rights,
sometimes referred to as Management and Letting Rights, is
a type of business that began in popular holiday areas such
as Surfers Paradise, Australia over 25 years ago. As more
and more residential and holiday units, apartment complexes
and town house/villa developments were built, the developers
realized the advantages of having an onsite manager who would
look after the day to day running of the complex and the letting
of units for absentee owners. Now Management Rights Businesses
are firmly established throughout Queensland and New South
Wales and in other holiday destinations throughout the world.
When Management Rights are purchased, the buyer also buys
the designated Manager's unit in a complex and it is from
here he runs the business. There is often an office provided
in the complex for the manager as well.
How Does the Manager Make an Income?
Body Corporate Salary The manager is paid
a salary from the Body Corporate. The Body Corporate is the
collective body of all the individuals who own units in the
building. The salary is indexed to the CPI (Cost Price Index)
to allow for automatic annual increases.
In return for the salary the manager looks after all the
common areas in the complex such as the pool, gardens, pathways,
tennis courts, gyms, stairwells, lifts and foyers. The Body
Corporate pays for items such as mower repairs and fuel, pool
chemicals, plants and fertilizer.
Letting Fees The manager earns money from
owners of units who wish to rent their units out to holiday
makers or long term tenants. He is usually paid 12% of the
rental fee for holiday letting and 5% plus a 2.5% management
fee for permanents. Permanent letting is considered 6 or 12
months or longer.
Holiday letting usually gives a higher income as there are
additional ways to earn more income such as phone calls, tours,
linen and cleaning. However, permanent complexes often have
100% occupancy and have less hours of work and less day to
day contact with tenants.
Many Management Right Businesses have a mix of holiday and
permanent letting units. All money collected from holiday
and permanent letting is held in a trust fund and dispersed
to unit owners, after expenses are taken out, at the end of
each month. By law the trust account is required to be audited
regularly.
Room Cleaning and Linen Hire Fees In holiday
complexes the manager can earn a substantial income from cleaning
units and from linen hire. The owner of the unit pays for
the cleaning/linen hire fees. Whether you do exit cleans yourself
will depend on the size of the complex. In big complexes many
managers contract a bulk set rate to commercial cleaners and
charge a retail rate to owners. The choice in small and medium
complexes is - do the physical work yourself and earn more
or hire labour and earn less.
Other income Other sources of income for
the manager are repairs and maintenance for unit owners, telephone
and internet usage, sporting equipment, tours and car hire.
Restricted Letting Agent's Licence To legally
let the units the manager will have to obtain a Restricted
Letting Agent's licence which is a short course of 6 modules
through TAFE Australia. This can be done at Tafe courses,
by correspondence or online. It is not difficult.
Cost of Management Rights The manager's
unit is usually sold at market value plus a premium of 10%
to 20%. This is because the manager's unit is the only unit
in a complex where the business can be run from. The business
value is calculated by the nett profit over the last 12 months
multiplied by the goodwill factor currently known as the multiplier.
A small complex may sell with a multiplier of 3 or 3.5 while
a large high rise apartment block with an income of over $100.000
may be a 5.0 or 5.5 multiplier.
The cost of Management Rights businesses ranges from as low
as $350,000 to up to $5,000,000 depending on the location
of the property, condition of the complex, occupancy rate
and nett income.
I hope this has given you an overview about Management Rights.
It is a great home business with a chance to earn a good income
for singles, couples and those who are older and finding it
harder to get jobs and the semi retired.
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where you can get your own money-making website with 5 affiliate
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Article Source: http://EzineArticles.com/?expert=Jules_Russell
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