28 Sep 2019
Words Ben Hall
Beachside Vs The Boardroom: Why ‘Southerners’ Are Migrating North To The Gold Coast
The southern Gold Coast and Tweed-Byron region has emerged as Australia’s hotspot for management rights purchases with a leading agency reporting “unprecedented” levels of sales and enquiries.
In the first two months of the 2019 financial year, almost $10 million in management rights businesses have been settled across eight separate transactions in the region as buyers, especially from Sydney and Melbourne, chase their “sea or tree change” business.
A further 14 management rights deals are currently either agreed or under contract for southern Gold Coast and Tweed-Byron with Australia’s leading specialist agency in the accommodation sector, ResortBrokers.
Management rights typically include the ability for an on-site manager to earn fees from letting out apartments in a strata titled building as well as earning a salary for managing day-to-day duties such as cleaning. The value of a management rights business is generally calculated by applying a multiplier to its annual profit.
ResortBrokers southern Gold Coast specialist Todd Warner said that since the Federal election in May and the start of the new financial year, the volume of enquiries for management rights businesses has reached record levels.
“There seems to be so much confidence in investing in the southern Gold Coast and the Tweed-Byron Bay area all of a sudden and the levels of enquiries and actual completed sales has been unprecedented,” Mr Warner said.
“What people are chasing on this patch of coastline is the incredible beaches, growth opportunities and the accessibility of Gold Coast International Airport which is great for both local and overseas tourism,” he said.
With a management rights business usually offering the potential to buy a unit in a strata title building, while earning a caretaking salary and income from a letting pool, enquiries have been coming from a broad range of buyers.
“We have a great mixture of experienced operators seeing the value in the region, as well as some high quality first timers looking for that sea or tree change business as an opportunity to move up and cash in from the Sydney and Melbourne property markets,” Mr Warner said.
“It’s beach side business versus the boardroom and high net passive investment for some of the larger syndication complexes,” he said.
“Everyone from builders to finance brokers are getting into the industry once they discover the solid returns and lifestyle opportunities available.
“A lot of these people are saying they want to be their own boss, and get into a low risk business model which has positive lifestyle choices.”
The sales prices for these management rights businesses have varied between $350,000 to $2.8 million.