Holiday Complex

About our valuations

These complexes operate similarly to Permanent complexes, with a letting pool, but the units are rented out as holiday accommodations. The length of stay for holidaymakers can vary, but typically, the units are rented out on a weekly basis. Larger complexes may allow for one-night or overnight stays and may function more similarly to hotels, with 24-hour reception and the option for guests to order local takeout to be delivered to their rooms.

The Manager's remuneration is typically higher (12%) for this style of business, and landlords may be charged for expenses such as linen, room cleaning, and other miscellaneous costs. While holiday complexes can be highly profitable, they are not recommended for first-time buyers of Management Rights. These businesses are in the Australian Tourism sector and are subject to external factors such as fluctuations in the Australian Dollar, competition from Bali/South East Asia, and the general state of the Australian economy, which pose a level of risk.

In summary, holiday complexes can be highly rewarding businesses, particularly during good economic times, but they do carry inherent risks.

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What is involved in the valuation?

In relation to the Management & Letting Rights business, factors such as;

• Location - E.g Beachfront, Riverfront, inner city, outer city etc
• Business type - Long Term Let, Short Term, mixed Long Term & Short Term Let, Student Accommodation, Over 55s Accommodation etc.
• Module Type - Accommodation Module, a maximum 25 year Agreement or Standard Module, a maximum 10 year Agreement.
• Ratio of Units in the Letting Pool, Owner Occupied, Outside Agents vs Total Units in the Complex.
• Leaseback/Rental Guarantees/Performance Undertaking Agreements - Are there any units where the current manager is responsible for any payment(s) to the Lot Owner (Investor)?
• Reported Net Operating Profit - Is it prepared by an MLR Specialist who knows Industry Standards?
• Return on Investment of the total purchase - i.e What is your return including the Managers Real Estate and MLR business.

The above needs to be established as different multipliers are attributed to different businesses. Unfortunately, it is not a simple practice of applying the same multiplier to every business.

More information

By engaging Accom Valuers, it will provide comfort knowing that you are looked after by specialist MLR valuers.

We are here to help, please feel free to contact us.

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