Holmans was proud to be a featured contributor in ARAMA’s recent “Meet the Professionals” webinar. The session brought together leading experts from finance, law, valuation, accounting and management rights sales to discuss the current state of the industry and provide practical advice for operators looking to strengthen, grow and maximise the value of their management rights business.

The webinar explored key topics including business valuations, finance trends, taxation, compliance obligations, agreement top-ups, letting pool protection and preparing a management rights business for future sale. Below is a summary of the key insights shared during the session, including commentary from Holmans Director and management rights taxation specialist, Lel Parnis.

Watch the Full Webinar

Missed the live session? You can watch the full ARAMA webinar right here:

 

ARAMA is the peak industry body representing management rights owners and operators throughout Australia. Members gain access to industry advocacy, education, training, compliance resources and regular industry updates designed to help operators build stronger and more profitable businesses.

To learn more about ARAMA membership, training programs and upcoming industry events, visit the ARAMA website.

Market conditions remain positive despite some softening

While transaction volumes have eased slightly across many regions due to higher interest rates, demand for quality management rights businesses remains strong.

Multipliers have softened in some areas compared to previous years, however well-presented businesses with strong fundamentals continue to attract buyer interest.

A key factor influencing business value is the return on investment available to buyers. As property prices and borrowing costs have increased, buyers are paying closer attention to business performance, agreement terms and overall profitability.

Top-ups remain one of the most important value drivers

One topic repeatedly raised by valuers, brokers and lawyers was the importance of keeping agreements topped up.

A top-up extends the term of management rights agreements, helping maintain both business value and marketability.

Businesses with longer agreement terms continue to attract stronger buyer interest, while businesses with shorter remaining terms may face additional scrutiny from purchasers, financiers and advisers.

Operators should:

• Understand their current agreement terms.
• Track key option and renewal dates.
• Plan top-ups well in advance.
• Treat top-ups as an ongoing business strategy rather than a last-minute exercise.

Finance approval timeframes are increasing

Finance approvals are taking longer than many operators may be accustomed to. What was once commonly a 30-day process can now extend to 50 or 60 days due to increased lender requirements and more extensive due diligence processes.

Interest rates also continue to impact borrowing capacity, particularly for buyers seeking to leverage equity from residential property.

Banks remain supportive of management rights lending, however buyers may need to provide more information and demonstrate stronger servicing capacity than in previous years.

For vendors, this means allowing realistic settlement timeframes and understanding that finance-related extensions are becoming more common.

Tax planning remains critical

Many management rights businesses have enjoyed a relatively strong financial year despite broader economic uncertainty.

While traditional tax minimisation opportunities have reduced over time, strategic tax planning remains essential.

Importantly, operators should focus on:

• Understanding future tax liabilities.
• Managing cash flow.
• Planning superannuation contributions.
• Reviewing business structures where appropriate.
• Seeking advice before making major decisions.

With significant tax proposals announced in recent budgets, operators should avoid making rushed decisions until further details become available.

Review your fees and charges regularly

For many operators, annual reviews of fees and charges can be an overlooked opportunity.

Where agreements allow, operators should review CPI-linked increases and ensure charges keep pace with rising operating costs.

This is particularly important given recent increases in wage costs, contractor expenses and supplier charges.

Regular fee reviews not only support profitability but also demonstrate sound business management to future purchasers.

Prepare now for changes to credit card surcharge rules

One significant issue raised during the webinar was the upcoming removal of merchant surcharge recovery for many businesses.

Operators currently generating income through guest credit card surcharges should assess the financial impact well before implementation and consider alternative strategies to recover costs or improve operational efficiencies.

Possible actions include:

• Reviewing merchant service providers.
• Negotiating lower transaction fees.
• Encouraging alternative payment methods.
• Reviewing booking and administration fee structures.

Stay on top of compliance obligations

Compliance remains a critical area of risk for management rights operators.

Industry experts highlighted several areas requiring ongoing attention:

• Real estate licence renewals.
• Corporate licence renewals.
• Trust account compliance.
• CPD obligations.
• Form 6 documentation.
• Letting agreement reviews.
• Cancellation fee authorisations.

Missing documentation or outdated agreements can create issues during audits, financing applications and business sales.

Strong relationships remain a competitive advantage

Understanding your agreements and maintaining positive relationships with committees and owners remains essential.

Operators should regularly review their caretaking and letting agreements, understand their obligations, and ensure expectations are aligned with those of the committee.

Likewise, maintaining strong relationships with owners can help protect and grow the letting pool, improve retention and support future business value.

Run your business as if you were selling tomorrow

Perhaps the strongest message from the webinar was that operators should manage their business as though they are preparing it for sale every day, regardless of when they actually intend to exit.

This means:

• Keeping agreements current.
• Maintaining accurate documentation.
• Reviewing fees and charges annually.
• Monitoring profitability.
• Staying compliant.
• Protecting and growing the letting pool.
• Building positive relationships with owners and committees.
• Seeking specialist advice early.

A well-managed business is not only more attractive to future buyers, it is also likely to be more profitable and enjoyable to operate in the meantime.

Need advice?

Management rights is a highly specialised industry. Whether you’re planning for growth, reviewing your tax position, preparing for a future sale or simply looking to improve profitability, obtaining advice from professionals who understand the management rights sector can make a significant difference.

At Holmans, we work with management rights operators across Australia, providing specialist accounting, taxation, audit and business advisory services tailored to the unique needs of the industry.

Disclaimer: This article contains general information only. Regrettably, no responsibility can be accepted for errors, omissions or possible misleading statements or for any action taken as a result of any material in this guide. It is not designed to be a substitute for professional advice, as such a brief guide cannot hope to cover all circumstances and conditions applying to the law as it relates to these items.

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Accommodation & Management Rights Enquiries
Phone: (07) 5430 7666 or email accom@holmans.com.au