Management Rights for Sale

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Accom Properties is the newest destination for buying or selling accommodation property and Management Rights in Australia

 

Management Rights For Sale

Management rights is the industry name for a business arrangement between resident managers of strata titled properties (complexes comprised of units owned by different entities) and a property developer or body corporate made up of unit owners.


Two agreements are key to owning management rights:


A ‘caretaking agreement’ permits a manager (or managers, often a couple) to live in one unit onsite and take care of common areas within the complex, such as swimming pools, tennis courts, stairs, the car park, etc. A base salary and list of responsibilities are included in this agreement with the body corporate.


A ‘letting agreement’ with the body corporate gives a resident manager exclusive rights to let out units in the complex on a commission basis. The nature of commission is often negotiated with each unit owner.
Management rights owners always reside onsite but the nature of their accommodation fluctuates depending on the complex. Some properties offer resident managers a one-bedroom unit and office for day-to-day operations; others may offer a luxury penthouse suite and private elevator.


Each management rights agreement is as unique as its property.



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Hotels for Sale


So you want to buy a hotel?


Hotels come in many shapes and sizes from smaller boutique properties to mid-sized B&Bs, larger multi-facility operations and huge, resort-style enterprises. To become a hotel owner is to invest in real estate as well as a business. There are many things to consider when purchasing a hotel investment.


What to consider when buying a hotel property:


Location: if you build it, will they come? Proximity to tourist hotspots, business hubs, hospitals, universities, etc., will influence bookings.


Competition: how many similar properties are in the area? Point-of-difference is a massive marketing tool and as an independent accommodation provider on social media it is much easier to market something that stands out.


Local business: will your guests have things to do? With Google maps on smartphone speed dial, it is easier than ever for potential guests to research local areas. People are more likely to stay somewhere if they spot a couple of interesting cafes, shops or bars within walking distance.


Development: what’s going on in the next few years? In just five years, a whole town or area can completely change. It’s well-worth checking what planning permissions have gone through; ask the locals about development rumours or upcoming upgrades. Find out if any new shopping areas, parks, schools, restaurants, roads, etc., are on the cards. These could all have an impact on future bookings for better or worse.



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Motel for Sale

So you want to buy a motel?

 

Motels are uniquely designed to target motorists and have a distinctively low-rise aesthetic. To purchase a motel outright and operate it yourself, would infer a situation known within the industry as ‘Freehold Going Concern’. This method of motel purchasing was particularly popular prior to the 1980s.

 

Nowadays, in Australia, people can purchase a long-term lease from a motel owner or landlord in a situation referred to as a ‘split’ motel. This motel leasing idea was pioneered in the 1980s by now managing director of Resort Brokers Australia, Ian Crooks.

 

How long is a motel lease?

 

The standard length of a lease in a split motel is approximately 30 years, made up of a ten-year baseline, plus multiple five-year extensions. Similar to a management rights agreement, the leasing party usually lives onsite and takes care of daily motel operations.

 

Who does what?

 

In both motel models, the landlord owner of the property takes care of all structural lot maintenance repairs. In a split motel, the landlord owner also receives annual rent from the leasing party. The rental agreement may include a review clause but usually increases by CPI each year.

 

The leasing party in a split motel runs the business side of things, doing all they can to increase profit-by-occupancy. They pay all operating fees and costs, including utilities. The owner becomes a passive investor in this agreement, responsible only for structural land/property maintenance.



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Caravan Park for Sale

So you want to buy a holiday park / Caravan Park?

 

A holiday park is an umbrella term referring to parks or areas that house caravans, cabins, camp sites and mobile homes for short-term let, permanent use, or a mix of the two.

 

Holiday parks are increasingly innovating and diversifying their space; not just with powered sites, ‘glamping’ rooms and ensuites but with resort-style facilities and varied services.

 

What are the purchasing models?

 

Like motels, holiday parks can be bought outright in an agreement known as ‘Freehold Going Concerns’, or in a ‘Split’ model that involves a long-term managing lease. 

In the freehold model, an owner-operator rules the roost, covering all fees, administration and maintenance as well as marketing, making bookings and keeping all profits.

 

In the split arrangement, it is the leasing party’s responsibility to operate the park, doing all they can to increase profit-by-occupancy, and pay the owner an annual rent. The rental agreement may include a review clause but usually increases by CPI each year. The owner becomes a passive investor in this agreement, responsible only for structural land/property maintenance. 



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Featured Properties

 
 
 

Modern Permanent
Exclusive

CAIRNS CITY
Modern Permanent

$630,000
Net Income: $85,000
Managers Estate: $265,000 2 Bed 2 Bath
Letting Pool: 38
Remuneration:

Property Pacific Management Rights
Deluxe Beachfront Resort Minutes to Noosa  | Resort Brokers ID : MR004722
Updated

SUNSHINE BEACH
Deluxe Beachfront Resort Minutes to Noosa ...

$2,709,558 firm
Net Income: $346,143
Managers Estate: $875,000 2 Bed 2 Bath
Letting Pool: 20
Remuneration: $64,113

Resort Brokers

MOOLOOLABA
Stunning Mooloolaba Management Rights...

$2,530,000
Net Income: -
Managers Estate: - - Bed - Bath
Letting Pool: -
Remuneration:

A B Brokers
Hervey Bay Gem
Exclusive

HERVEY BAY
Hervey Bay Gem

$1,069,000
Net Income: $173,100
Managers Estate: $395,000 4 Bed 2 Bath
Letting Pool: 11
Remuneration: $19,062

Lindsay Petty Management Rights
Business For Sale - Ticks All The Boxes - ID 8387 BL
Updated

ARUNDEL
Business For Sale - Ticks All The Boxes -...

$2,395,000
Net Income: $359,000
Managers Estate: $450,000 3 Bed 2 Bath
Letting Pool: 86
Remuneration:

MR Sales
1697MF - Outstanding Freehold Family Business
Exclusive

TUMUT
1697MF - Outstanding Freehold Family...

$2,800,000 Freehold
Net Income: -
Managers Estate: - - Bed - Bath
Letting Pool: -
Remuneration:

Tourism Brokers

Supplier News

 
 
 

MAHONEYS: Queensland’s leading management rights lawyers

19th May, 2017

With offices in Brisbane and on the Gold Coast, Mahoneys law firm specialises in property, commercial, hospitality, litigation and dispute resolution legal services. A particular area of expertise is [...]

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Tips for selling management rights

by John Mahoney 29th March, 2017

As I have said in previous Resort News articles, and at the risk of stating what to many might seem obvious, the most important piece of advice I can give potential sellers of a management rights busi [...]

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What lies ahead for 2017?

by Jonathan Hanaghan 28th March, 2017

Well, I think for most of us 2016 went better than expected. Generally speaking, cheaper borrowing costs combined with a lower Australian dollar and solid rental growth led the way for solid economic [...]

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Property News

 
 
 

MAHONEYS: Queensland’s leading management rights lawyers

19th May, 2017

With offices in Brisbane and on the Gold Coast, Mahoneys law firm specialises in property, commercial, hospitality, litigation and dispute resolution legal services. A particular area of expertise is [...]

Read More

Deal killers: have we beaten the fatal five

by Mike Phipps, Resort News Contributor 09th May, 2017

Back in 2011, I wrote about experiences we were having that resulted in transactions not proceeding. We identified what we referred to as the Fatal Five and introduced the article at the time with the [...]

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Thinking of buying a management & letting rights business?

by Jonathan Hanaghan, Resort News Contributor 09th May, 2017

This article is aimed at first-time buyers entering the industry. I will now go through a basic staged plan to assist with the process. This list is by no means exhaustive but a general guide. Some [...]

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