Management Letting right (MLR)
Need funding to purchase a Management Letting Right business? Our experienced management rights specialists will discuss the finance options available and help you choose the right facilities to suit your situation.
Eligibility and Requirements
To operate a Management Letting Rights business in Queensland, you need to meet specific requirements:
Licensing and Accreditation
You must obtain a Resident Letting Agent Licence or Real Estate Licence to legally manage the property.
Compliance with Laws
You need to adhere to various regulations, including Body Corporate laws, tenancy regulations, and health and safety standards to ensure the proper management of the property.
Experience and Skills
Strong skills in property management, customer service, and administration are required to handle the responsibilities of tenant relations, property maintenance, and business operations efficiently.
Deposit
Depending on the nature of the property and the management structure, a deposit of 30% to 40% of the purchase price is generally required to secure financing for the MLR business.
How Much You Can Borrow
The amount you can borrow when financing an MLR business is influenced by several factors:
Deposit Requirement
For short-term letting (like holiday or serviced accommodation), lenders typically require a higher deposit of around 40%, as the income stream is more variable. For long-term letting (permanent rentals), the deposit requirement is usually between 30% and 35%.
Onsite Manager’s Unit
If you are purchasing a manager’s unit as part of an onsite MLR agreement, banks may finance up to 80% of the purchase price for the unit, as it is considered a residential property, separate from the business component.
Business Viability
Lenders will also evaluate the stability of the Body Corporate Salary and the income generated from the letting pool. A stable and reliable income stream can improve your chances of securing financing.