Management Letting Rights businesses (MLRs) offer a relatively secure way to invest and earn an income and build a saleable asset while still being "your own boss".
There are over 4,000 MLRs operating in Queensland with the majority focused on holiday letting outside Brisbane. However with an increasing trend towards apartment living, permanent MLRs are also becoming more and more prevalent – just look at all the cranes across the skyline at present!
What is a Management Letting Rights business?
A MLR business is an enterprise that involves the caretaking and letting of townhouse and unit complexes (strata titled properties).
When you buy a management rights licence, usually real estate in a community titles scheme, you typically gain:
- The right to use an office
- On-site accommodation
- The responsibility to maintain or supervise the maintenance of the common property within a body corporate eg. gardens, swimming pools, pathways, lighting and lifts
- An authorisation to let lots for owners as their letting agent
- Or a combination of the above
You make your money by taking a small percentage of the weekly rent collected, from a fixed monthly wage paid by the body corporate that is reviewed annually, and on the sale of your MLR business. In some cases, you can earn additional income through cleaning and household services.
There are also different types of complexes that can have MLRs attached:
- Short-term letting including holiday and corporate letting
- Permanent letting
- Student accommodation
MLRs appeal to many people for the:
- Opportunity to combine their living and business arrangements to save money
- For lifestyle
- For the location
- For the identifiable and recurring income generated by the business
About the MLR industry
The concept of management rights was established in Queensland in the 1960s.
MLR arrangements are usually set up by the developer who sells the MLR prior to selling the units.
New MLRs give you the opportunity to establish your own business from the start and put your own stamp on it without having to rectify any issues. However, buying an existing MLR allows you to assess the track record of the business and estimate the potential for improvement and growth.
Either way, there are two difference types of licences you can choose to operate your MLR:
- A resident letting agent’s licence
- A full real estate licence
Please contact Smiljan Jankovic from Archer Gowland for more information regarding the differences of each licence and the pros and cons of each.
Want more information on how you can increase the profitability of your management rights business?
Instantly download the FREE Archer Gowland Ebook (below) "Increasing the Profitability of Your Management Rights Business". In this guide you will find a list of key success factors, ways to make more money and how to prepare your MLR for sale.
You are also invited to contact Smiljan Jankovic from Archer Gowland on 07 3002 2699 for a free information session regarding your MLR business.
Our promise to you - your contact details will remain confidential at all times. You will receive only one email per month with valuable information to improve your financial situation, however you can unsubscribe from this correspondence at any time.
PS. Sign up to receive the Archer Gowland Blog, regular accounting updates for business owners. Click here: http://blog.archergowland.com.au/.
