There is no established commission formula. In fact most village operators
dont pay commission to managers it is seen as part of the job function. But this
is changing.
Formulas will depend on the size of the village and turnover of ILUs. One
village pays its manager $300 per sale, based on a village of 300+ ILUs. With
an average ILU turnover every 8 years that manager can bank on a bonus of
$11,000+ each year.
The more astute owners and managers realise that vacant ILUs cost money.
Every month a $250,000 ILU with a 30% DMF is vacant costs the operator
$1,000 in lost interest on the DMF fee before the extra cash from the capital
appreciation is taken into account. This argues it is better to have a fast sale and
allow the manager to get a bonus of say one month interest saved.
A real estate agency charges 3% commission or $7,500 to sell a $250,000 ILU
and the selling agent will personally receive around 1%, or $2,500. On new village
sites this may be seen as reasonable.
Opinion
RIP: We are seeing the death of the family-run aged care operator
It feels like I am writing an obituary to family-run aged care facilities. Once the backbone of the sector, multi-generation operators are now selling out at a pace not seen before. The sell-off is accelerating, with three landmark deals in just two...
