Management Rights
Put simply, Management rights is the term that describes the business of looking after strata (unit) titled properties. Management Rights operate in unit-titled holiday and residential properties where a significant number of unit owners are investors, providing an effective management model for real estate investors.
It is a concept which combines property, business and lifestyle in one package. Developed and refined in Queensland, this successful management model is now widely accepted and is being adopted throughout New Zealand, Australia and a growing number of other countries including USA.
The Management Rights for an apartment building or complex are initially created by the developer or, in the case of an existing building, may be established at a later date. The package consists of long-term caretaking and letting agreements and usually includes a manager's unit and an agreed manager's salary. The rights are sold by assigning or transferring the agreements with the approval of the body corporate.
Management Rights are operated by a resident manager who:
- has a caretaking service contract with the body corporate and attends to caretaking, gardening, pool care and cleaning duties specified in the contract, as well as coordinating the work of other service contractors;
- has a letting authorisation to conduct a letting business on the premises and is the only person who can conduct a letting business on site. The resident manager is not currently required to be licensed under relevant legislation in New Zealand - unlike their counterparts in Australia;
- owns a unit in the building (or leases a designated unit) and either lives on the site or has an employee living on site;
- is a member of the body corporate (as a unit owner);
- has a financial investment in the scheme and therefore has an incentive to ensure the scheme operates well;
- maintains an office on site, either on title or with exclusive use on common property, from which the letting business is conducted.
Management Rights buyers come from diverse backgrounds. Specific qualifications are not necessary, but good management and communication skills are vital. Successful owners usually enjoy living and working in a chosen location, combining business and lifestyle advantages.
Holiday letting Management Rights offer high returns on investment, generating income from rentals and service charges. The tourism component affords the opportunity to grow both the income and value of the business through strong marketing. Holiday complexes usually offer a desirable location with added lifestyle benefits.
For more detailed information please click the link below for an Australian report.