The minimum amount of cash or equity in your house that you need to purchase management rights is approx $150,000.

A general rule to determine the purchase price of the complex is multiplying your cash input by 2.85 times. Example:

If you had $300,000 cash, you could purchase a complex worth $750,000.
If you had $400,000 cash, you could purchase a complex worth $1,100,000

The size of the complex will be subject to there being sufficient income to repay your loans, general living costs and taxes.

The majority of financiers that specialise in management rights will lend between 60% - 75% of the purchase price of the complex. Example below on a purchase price of $1,100,000

Unit	$400,000
Business	$700,000
	$1,100,000
5% costs	$60,000
Total	$1,160,000
Less min cash	$400,000
Funding	$760,000

The funding amount of $760,000 is generally broken up into 2 loans.

1. Based on 75 - 80% of the market value of the managers unit structured over 30 yrs or interest only
2. The balance of funding can be structured over the remaining term of the agreements with the body corporate. Interest only loans are also available.

$320,000 Interest only	=	$1,974pm (Interest only)
$440,000 over 15 years	=	$4,282pm (principal and interest)
$447,000		$6,256pm

An experienced finance broker specialising in management rights will be able to guide you through the whole finance process and assist in the following:

Provide information on structuring, repayments, set up costs
Providing advice on your purchase price
Assist in arranging valuations, completion of paperwork for the finance application
Negotiate with the financier to achieve the most competitive financial package for the client.
Obtain indicative offers from the financiers and present the information with additional commentary about the financier
Before you proceed with a finance broker, ask them how many management rights transactions they have completed. You don't want to be the first one.

You can borrow against other property to purchase management rights. The Banks will consider up to 80% of the market value of your property less any current debt. eg: your house is worth $800,000 with a debt of $200,000.

$800,000 x 80%	=	$640,000
Less current debt		$200,000
Available equity		$440,000

(This amount would allow you to consider a business around $1.2M subject to the income being sufficient to service loans, taxes and general living.)

Whenever you borrow against property to fund the purchase of management rights, it can create a strain on your cash flow as the majority of your income goes towards loan repayments.