Management rights give you the right to operate a letting business and fulfil the role of a caretaker, or usually known as a resident manager. Many Australians choose this investment venture because it has good returns and allows them to have a work-life balance.
How Does it Work?
If you want to know more about what management rights are, you have to understand strata titled properties. Strata titled means that a building or complex with a number of units has different owners. Interested management rights buyers pay for the unit to live in them (owner-occupiers) or use them as an investment by finding potential tenants. Properties with strata titles have common properties, such as the hallways, stairs, driveways, garden, gym, and swimming pool.
Which is Right for You?
1. Permanent – Also known as residential letting, this involves those who prefer to find potential tenants, collect rent, and maintain the property. Most tenants stay up to six months or more, which can be a steady source of income. It has a lower rate of return per unit, but you don’t need to have remarkable skills at marketing it.
2. Holiday or Short-Term – This is similar to operating a resort hotel. It has higher returns due to the commissions and services you can offer to short and long-term tenants. It’s more difficult to handle because you have to understand how the corporate and tourism industry works. You’ll need good marketing skills to encourage your audience to sign the lease.
3. Off the Plan – This means that the business (letting) isn’t as certain as buying an existing management rights venture (property to let). The contract will state what you’re specifically buying, so it’s more complicated to understand. Most investors prefer to seek the help of property brokers and other related experts when making a decision.
Management rights are beneficial if you know which is suitable to your abilities and skills. If you’re still undecided, it’s best to seek assistance in understanding better what management rights are and how they work.