Management Rights Finance

“Management Rights” is the on-site management business
of an apartment building or unit complex.


Location

Firstly it is important for you to understand where you would like to live and whether CBD, Coastal OR living in the suburbs are important to you.   This decision can be made based on the amount you want to invest and also the type of lifestyle you want to lead.

 

Property Types:
Holiday, permanent, corporate or student  accommodation

Secondly, you need to decide whether you are interested in managing a:

  1. holiday apartment letting out short to medium stays
  2. permanent complex with units or townhouses with longer term stays
  3. corporate complex with short to medium type serviced apartments for business visitors
  4. student complex where typically rooms or complete apartments may be leased out for longer term stays

Balance between lifestyle and income

To find the right property for you to invest in, it is important to understand the balance between where you want to live and what income you expect from the business.

 

Some people will have the goal to maximise income while some people will place priority on the standard of living in the managers’ apartment.

 

Of course you can achieve a high standard of both lifestyle and income but the premium properties that do offer this, sell quickly. Therefore, it’s important to place yourself in a strong buying position with finance organised prior to finding the perfect property.

 

Place high importance on your own research by looking at many properties to understand the type of property that you are interested in.

 

Click here for more information on:

  • Running a Management Right business
  • Caretaking agreement
  • Letting agreement
  • Managers’ unit
  • Business income

Securing Finance

MR Finance will help you understand your spending limit before you actively seek a property. Once your financial parameters are known the real search for the right Management Rights business can begin.

 

The majority of Management Rights’ lenders are approving loans up to 70% of the combined market value however in some cases upto 75% of the combined market value. A purchaser is able to borrow up to 100% as long as there is enough equity in other property and the business (along with other income) is earning enough to meet the commitment. A combination of bank and equity finance funding of up to 95% can be achieved without the need for additional security.

 

Click here for more information on:

  • First time owner finance
  • Lending against property
  • Finding a property
  • Evaluating a property value

Loan Structure

Management Rights is a business with specialised finance needs. There are approximately eight banks in Australia that provide specialist lending for Management Rights. MR Finance will evaluate lending options and ensure your loan structure is correctly set up for your individual situation.

 

Banks that specialise in Management Rights offer loans with a variety of features including:

  • a revolving business line of credit

  • principal and interest loans

  • interest only loans

  • fixed or variable rates

  • redraw and 100% offset

  • 100% financing with additional security


When setting up your loan structure, MR Finance will:

  • evaluate the loan term and explore the option of fixing the rate for a term
  • evaluate flexibility features of the loan, including redraw and/or offset facilities
  • maximise tax effectiveness
  • set up a repayment structure that will work with the predicted cash flow
  • apply the correct interest rates and establishment costs taking into account discounts available for management rights transactions
  • take into account limited guarantees and borrowing entities
  • facilitate the set up of everyday deposit and Trust accounts, EFTPOS, BPay, Electronic Banking

There is more than one way of structuring a loan and MR Finance will work alongside your Accountant and Solicitor to ensure the correct structure is set up during the process.

 

In the evaluation of the right loan structure, MR Finance will review the total package to make a recommendation for your individual needs.