Selecting a Management Rights business should not be a quick decision. It is important to research and discuss your circumstances with people who know and understand the industry.
In addition to the information provided here in the Australian Management Rights web site, you can visit other sites, attend seminars and speak with Managers who are currently operating or have previously owned Management Rights.
We invite you to register for one of our Information Only seminars or alternatively our Useful Links section will provide additional resources for you.
When you have decided that Management Rights is right for you, enlist the assistance of a specialist Agent to assist you in finding a complex that will suit your individual requirements. Management Rights is combination of commercial and residential real estate and therefore your interests are best served by seeking out an agency that understands the industry.
Property Pacific Real Estate was established with the express intent of providing specialist sales and marketing services to the Management Rights industry. At all times the agency has been staffed by ex building and resort managers who have the Management Rights experience and expertise to offer specialist services to their clients. With representation from New South Wales, the Gold Coast, through Brisbane and the Sunshine Coast to the Far North; Property Pacific is known for its professionalism, its knowledgeable, experienced sales agents and the ethical, educational assistance provided by the team.
Jan Grover and the team invite you to arrange a no-obligation, confidential interview to further explore this exciting industry or, alternatively, visit the Property Pacific website, www.propertypacific.com.au, for additional information and Management Rights sales listings.
You may also wish to download the Property Pacific Buyer’s Guide. which provides useful tips which will assist you with your purchasing decision.
Most people start their research by viewing property listings on the web and then, having researched the possibilities, arrange to inspect properties on interest with their Agent. Your Agent will arrange suitable inspection times with the property vendors and will also provide you with more detailed information about your selected properties including current financial information.
During these inspections you will be shown around the complex, including the common property and the Manager's residence. It is not always possible to inspect the rental units if they are tenanted.
After looking at several complexes, you will then draw up a short list for second inspections. If you have specific questions that you want answered, let your Agent know so that the Vendor is prepared.
At this stage your Agent may well suggest an early discussion with a specialist Management Rights lender in order to establish your purchasing power. Most lending institutions are very comfortable with Management Rights businesses but, again, it is important to liaise with a lender with current working knowledge of the industry. Important points to consider:
- The value of your home, superannuation, additional investments, savings, shares and other assets
- Whether or not these assets will need to be sold in order to raise the necessary capital contribution for your purchase
Lenders will look very closely at your ability to service the loan regardless of your assets. This financial decision will be made very early in your investigations with the bank in order for you to determine your borrowing power.
An early appointment in your purchase process should be with an Accountant with experience in the Management Rights industry. Their specialist knowledge will be invaluable to you prior to purchase and for the ongoing management of the business.
It is very important to appoint a recognised accountant whose reports will be accepted by your financier. Your accountant will normally attend to the following:
- Prepare a report which will verify the net profit as stated by the seller
- Review Trust Account records
- Advise of any income streams or expense which are not normal in the management rights business
- Check all letting appointment agreements
You will be required by law to have your trust accounts audited on a regular basis and your accountant should be able to assist in this process.
Crosbie Warren Sinclair (formerly Window de Stoop) is well recognised and respected in the industry. As practicing accountants and CPAs with over twenty years experience, many of which are heavily involved with the Management Rights industry, Crosbie Warren Sinclair offers the following documents that will assist you before, during and after entering Management Rights:
- Accounting Matters which includes Before Signing,Verification and Profitability, Bookkeeping - General Accounting and Trust Accounting, Taxation Matters and GST Implications
- The Accountant’s Perspective, a step-by-step guide to assist you through the purchasing process, your business operation and the eventual sale of your business
Your Solicitor is an integral part of the Management Rights transaction. He / she will be able to correctly structure the business initially to ensure success in your venture. Your Solicitor will liaise with everyone including your Agent, your Accountant, the Vendor’s Lawyer and most importantly You! Your Solicitor will step you through the whole process ensuring that your interests are protected at all times.
Rob Balanda and Clayton Glenister of MBA Lawyers are specialists with many years experience. MBA's advice and due diligence is a comprehensive process and includes the following:
- Structure: Looking at how the business is to be structured initially is paramount to avoid paying unnecessary tax and enhancing growth of the business.
- Contract: Liaising between the Financier, Accountant and Agent to ensure the contract includes specific clauses to protect your interests.
- Due Diligence: This is the most important task that your Solicitor will undertake. By conducting a comprehensive legal due diligence review on the business, they will make sure there are no legal issues with the Caretaking and Letting Agreements. A full search of the Body Corporate records will be conducted on your behalf to ensure that there are no major Body Corporate issues pending or any issues with the contract or the current Manager. The conveyancing of the Manager's unit will be included as part of this process.
- The Body Corporate: The settlement of the Management Rights is always subject to the Body Corporate's approval. This is usually a committee meeting held in the offices of the Body Corporate Manager. Your Solicitor should step you through the meeting process and the potential questions which may be asked. They should also liaise with the Body Corporate's Solicitor in relation to any changes to the Deed of Assignment.
- Settlement: Your Solicitor should make the settlement as smooth as possible whilst you are learning the business on-site. Usually there is a two week training window (one week prior and one week after settlement). Your Solicitor will attend to settlement figures, signing of documents and will attend the settlement meeting on your behalf. Your Solicitor is the one to ensure everything happens as planned and should keep you kept up to date at all times.
Your Solicitor should be able to communicate with you in a personal easy to understand manner and most importantly, deliver results. If your current Solicitor does not specialise in Management Rights, then they should not be used for this process. Management Rights is a highly specialised field and the wrong advice can have disastrous financial consequences.
For more information about MBA-Lawyers, please visit their web site at www.mba-lawyers.com.au.
At some stage in the purchasing process you will need to complete the Resident Letting Agent's Licence training course. Training is available in either a classroom situation or by distance or internet learning. Please refer to our Training and Licensing resource for more detailed information and links to certified Training Providers.
