The Ultimate Home Business - 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.nnWhat are Management Rights?nManagement Rights, sometimes referred to as Management and Letting Rights, isna 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. nnWhen 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 annoffice provided in the complex for the manager as well.nnHow Does the Manager Make an Income?nnBody Corporate SalarynThe manager is paid a salary from the Body Corporate. The Body Corporate isnthe 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.nIn 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.nThe Body Corporate pays for items such as mower repairs and fuel, pool chemicals, plants and fertilizer.nnLetting FeesnThe 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.nnHoliday letting usually gives a higher income as there are additional ways to earn more income such as phone calls, tours, linen and cleaning. However, permanentncomplexes often have 100% occupancy and have less hours of work and less day to day contact with tenants.nnMany Management Right Businesses have a mix of holiday and permanent lettingnunits. All money collected from holiday and permanent letting is held in a trust fund nand dispersed to unit owners, after expenses are taken out, at the end of each month.nBy law the trust account is required to be audited regularly.nnRoom Cleaning and Linen Hire FeesnIn 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. nnOther incomenOther sources of income for the manager are repairs and maintenance for unit owners, telephone and internet usage, sporting equipment, tours and car hire.nnRestricted Letting Agent’s LicencenTo 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. nnCost of Management RightsnThe 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 nwith an income of over $100.000 may be a 5.0 or 5.5 multiplier. nnThe 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.nnI 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.