Quick investment returns, the alignment of home and business, and lifestyle improvement; these are the most common reasons people venture into management rights. The management rights industry offers an investment proposition that is safe and secure, and yields good profits.
But similar to other establishments, the success of your management rights business will depend on how well your unit. There are two types of management rights agreements: the caretaking and letting agreement. You need to perform your caretaking and letting duties properly in order to run the business successfully and reap the best results.
The caretaking agreement refers to the requirement to care for and maintain the common property. Your written contract with the Body Corporate or property owner will specify the caretaking duties you need to perform. Some agreements are general, while others are very detailed, specifying your daily, weekly, monthly, and “as required” duties.
Know whether your duties are personal or supervisory in nature. Personal duties require you to perform the work on your own or hire contractors or employees. Supervisory duties are when the body corporate pays contractors to perform the caretaking jobs, but the operation will be supervised by you. There’s often a mix of personal and supervisory duties in most caretaking agreements. It’s important to know what the property owner expects from you and to understand the nature and extent of your duties.
A typical management rights arrangement includes a contract with the body corporate that authorises you to let units within the complex. You can’t obtain a resident letting agents license without this agreement, but it’s usually unnecessary if you already have a real estate agents license. The contract will require you to promote the units, supervise the tenants, and maintain an office or reception area. Your income will be based on your agreed letting commission with the property owner.
A management rights arrangement will provide you with a personal unit. You may live in the unit or let it for an extra income. Living on-site gives you the opportunity to accomplish your caretaking and letting duties more effectively, allowing you to cut costs and attend to tenant matters quickly.
A management rights business can be one of the most successful ventures you can have. But in order to get the best results, you need to operate the business effectively, from caring for the property to letting units and supervising tenants.