Onsite Managers
Why on-site managers?
A body corporate may decide to engage or employ an on-site manager to arrange for contractors to carry out maintenance and other work on the common property of the residential complex as opposed to hiring expensive contractors.
What agreements exist between the body corporate and the onsite managers?
Typically, two agreements,
1) Caretaker agreement
2) Letting agreement
How does the body corporate benefit from having the onsite manager manage the rental pool?
By having the letting pool managed by the onsite managers, the business is more attractive to a potential onsite manager buyer. This means only the best candidates are attracted.
Supplementing the income of onsite managers using the rental pool allows the body corporate to reduce the overall cost of maintaining the unit complex, which reduces the body corporate fee.
If an onsite manager is not affordable, expensive contractors must be hired to perform caretaker duties. This would mean that there would not be an onsite manager, which counters the benefits that an onsite manager provides to the complex and overall investment.
Professionals are attracted because property management requires complying with legislation and licensing and prevents incompetent caretakers from operating the business.
Why do “Outside Agents” manage some properties?
Outside agents can sell a unit to an investor and “gain the property into their rental pool. This is a big problem for onsite managers because the number of units in the rental pool determines the business price. This is unethical for outside agents, but outside agents are unscrupulous. Generally, they convince the unwitting investor that onsite managers are inferior, which is not the case.
What is the Onsite managers’ remuneration?
There is a body corporate salary covering work done around the complex.
The income from the rent roll is subject to the business operations.
What are the typical expenses of the onsite manager’s business?
License fees
Professional and Liability Insurance.
Overheads, costs (Utils, office equipment, management software and cleaning machinery)
Business mortgage - Typically because the business is acquired by purchasing a running onsite management business. (20% to 25% of the gross income).