What should I consider when buying Management Rights 'off the plan' ?

As with any business, buying off the plan has its risks.  For example you may do projection research and ascertain that you will be able to successfully let out all the lots.  In reality this may not be the case and you may not achieve the letting numbers you require.  In simple terms, you will be paying too much for the rights.

The following tips will assist you when you are considering purchasing ‘off the plan’:


> Research the developer to find out their reputation and who they traditionally sell their units to.  What are their predicted rental incomes and expenses and are these realistic?

> Enlist a trusted and experienced legal firm and experienced Management Rights Accountant.  Seek advice of an experienced Agent such as Alert Property Group.

> Your lawyer will cover this but ensure your contract is subject to due diligence.

> Find out the following from the developer –

- Will they allow the unsold units to be rented out by you prior to settlement?  If this is the case then they will have to consult the investors.

- Will they release the details of the investors to allow early contact?

- Can you negotiate early entry to the unit to begin business as soon as possible?

- Will they allow a clause in the contract advising they will not let any units in the complex?

> Ensure you are aware of the impacts of GST on your off the plan purchase.


The above are a snapshot of tips that you must consider or investigate prior to purchasing off the plan.  If done correctly a Management Rights Business can reap great benefits through successful implementation, however be aware of the risks involved and always seek professional advice.  Contact our experts at Alert Property Group if you require further advice.