Choosing the Management Rights that suits you
Permanent Letting Complexes consist of owners with long term rental properties and in some cases owners residing in their properties. This style of business can offer minimal demands on you as the business owner and generally makes a good choice for work/life balance. It comprises residential long term letting, as well as maintaining the properties and complex, and you will find the income derived from this style of business quite steady.
A short term letting business is similar in operations to that of a resort hotel. These businesses will generally offer higher returns through higher commissions and additional income streams from service charges that are associated with this style of business, but will require an understanding of the corporate or tourism industry. The buildings will often have more guest facilities such as gyms, spas, or multiple pools. Your marketing and management skills are essential tools in the successful operation of these types of businesses.
When purchasing “off the plan” it is essential, from the beginning, to get your contract right with the developer. These businesses are based on projected figures and often have generic management agreements. Talking with your management rights broker and an industry solicitor will help you understand the risks associated with these contracts. Overstated projections or objectionable clauses in the management agreements should be reviewed at the early stages to ensure a smooth sale transition. It is important when buying off the plan that you and the developer comply with your respective obligations through each stage of the sale and building process. Having an industry solicitor will ensure your rights (as a purchaser) will be protected.
When an “off the Plan” management rights business is resold it becomes a “going concern”. A “Going Concern” business can be an easier process for you to manage as it will have been in operation for a period of time and you will be able to verify actual figures, review working management agreements and have a clearer understanding of the duties and time involved in running the business.
Which one suits you?
Not every management rights business suits every potential purchaser. A little self reflection could be the best decision you can make in considering your management rights purchase. A service-oriented personality can be more suited to holiday style management rights, whilst an administrative background is quite useful in permanent management rights businesses. The right combination of the business, skill and personality will ensure long term benefits and a good work/life balance for you.