At first glance the business of Management Rights can appear complex,however the Management Rights industry plays a very important role in the Queensland economy and the tourism industry in particular, and the businesses are strictly controlled through the Queensland State Government’s Property Occupations Act 2014.
This legislation has formalised control of the industry providing safeguards and sureties for unit owners, Bodies Corporate and Resident Letting Agents.
Selecting the right type of Management Rights is important.Management rights are defined in two primary categories, Permanently Rented Complexes and Holiday Complexes and while these definitions are self explanatory there are significant differences from the resident managers point of view.
The Manager’s emphasis in a permanent complex is predominantly care taking and accounting to owners, and maintaining the common areas. The business includes collecting rent, supervising any tradesmen,whether they are working on the common areas or in apartments in the Manager’s rental pool. A permanent complex provides an easy lifestyle and a 9am to 5pm style of job.
The Manager’s income is derived from the Body Corporate Salary,commissions from letting the apartments which is about 8% of the rentals, and re-letting fees when placing new tenants in the complex or a new lease with an existing tenant. Further income can be earned from maintenance work carried out which is not covered by the general nature of the Body Corporate Agreement.
There is greater demand on the manager of a holiday let complex,where in addition to the cleaning and maintenance of the common property, the other functions relate to the business of holiday letting.
Management of a holiday complex can be most successful with good common sense, good people skills and an attention to detail. This is a service industry and the Manager has to provide a service to the Guests and the Owners. It is essential that the Manager ensures that the property has a happy welcoming atmosphere created by the staff, and that the apartments are immaculately clean.
The functions of the office is to operate a booking service which generates and takes bookings and a trust accounting system for receiving rentals and accounting to the owners at the month’s end.Computer programs such as Hirum, RMS, Puma and EzyRez have greatly streamlined these duties.
The aim of the Manager then is to maintain or increase occupancy and this will vary from property to property.
The Manager of a holiday let complex is well compensated for all the effort with higher commission rates and many other income streams feeding into the business such as the manager’s margin on cleaning expenses, guests telephone calls, supplying PABX systems to apartments,commissions from selling tours and hiring cars, sale and hiring of supplies and goods and payments for any work done for owners in their apartments.
As in all real estate, position is of prime importance in choosing the holiday let complex.
Management rights have flourished on the Queensland Gold Coast for many years and quickly spread into Brisbane and along the Sunshine Coast to Noosa. This was followed by the Cairns / Port Douglas region, Airlie Beach, Whitsundays and Hervey Bay. Eventually the concept was taken up by developers in NSW and Victoria where today management rights can be found in almost every state in Australia.
While every rule can be broken there still remains some important factors to consider when choosing the location for your management rights. If you decide on a permanent complex consider that the majority of tenants will probably be working couples who will be conscious of easy access to employment centres. For this reason, most permanent let complexes are to found in densely populated areas and not in holiday destinations
In choosing a holiday let location you must consider the most popular tourist areas, which can be accessed easily by air. One must then consider the activities of the tourist. Here in the Cairns – Port Douglas region this is hardly a consideration with all the activities of the reef, rainforests etc. etc. etc However, consideration must be given to the infrastructure in the immediate vicinity of the complex where the tourist can access restaurants and bars within a reasonable distance of the complex.
There are many highly successful complexes that have none of the above, however giving these factors a few minutes consideration will pay dividends when selecting the most rewarding location for your holiday let complex.