Management Rights here to stay

Wednesday 21 March 2012, 2:23PM
By Tourism Properties Waikato - Coromandel

It seems in New Zealand that we have overlooked a vital part of our tourism business: Management Rights.  

When you take a look at these resorts you will notice straight away that they offer everything a guest could want: clean, modern, spacious apartments with resort facilities, strategically located in our top tourist spots throughout New Zealand.  

These apartments are on level with any top hotel, but are more spacious, self-contained and usually  more affordable, especially if there is more than two of you travelling.

An example of one we are currently selling looks like this:

Management Rights to Oceans Resort, Whitianga.

The offer comprises:
    •    The Management Rights Agreement to 2026 including:
    •    annual salary for maintenance of the common property and facilities.
    •    additional revenue for maintenance of the grounds in private ownership 
    •    letting rights to apartments in the pool, generating income from commissions, cleaning charges and additional services.
    •    Ownership by Unit Title of the main Administration Block which includes Reception, 80m2 Conference Room and well-equipped Kitchen.
    •    Ownership by Unit Title of 2 Auxiliary Units including 17 carparks, 2 storerooms and 2 laundries
    •    An extensive chattels list including everything necessary to deliver the agreed services.

Very attractive proposition!

If you have experience in Tourism or Accommodation industry, you will know that it is hard work trying to keep up with fashions and modern luxuries that your global patrons expect.  It is near impossible to keep forking out money for expansion or renovations in a tourism climate that has distinct highs and lows.  

With a Management Rights business, generally the body corporate looks after external maintenance while the individual apartment owners take responsibility for the maintenance and refurbishment of their investment.

Leaving you to focus on driving the business!

And rather than facing monthly rental payments to a landlord, the Rights owner receives a regular salary from the body corporate.

Plus, most Management Rights businesses include title to an apartment or other real estate.  While that can make Management Rights look expensive compared to say a motel lease, you own that real estate and can use it as security to help finance you into the business.

Without trying to make the Aussies look good, they have been able to provide some good management business structures and governance.  We are now adopting these practices, with the Unit Titles Act giving us a framework and the Department of Building and Housing
giving us all the info we need to charge ahead.

Currently on our site we have over 10 different management rights businesses for sale throughout New Zealand. We expect that this business model will keep growing in New Zealand for a long time to come.

For those of you who are still a little unsure about how it all works, here are some basics from the professionals...

Management rights vs Operating a Motel lease.