Question: Why should I invest in Australian Property?
Answer: South African individuals are allowed in invest up to R4 million in terms of the foreign capital allowance. This is your safest way to hedge against Rand volatility and create a nest egg in a stable, growing, foreign economy, like Australia's. Residential property is one of the safest investments and consistently shows growth in value with good taxation benefits. Australia has over 100 years of recorded statistics showing property values almost doubling every 10 years. In 2008 alone there was a national shortfall of 30,000 new homes and increasing annually. Property finance is readily available from Australian banks, which makes gearing an attractive way to increase the value of your investment.

Question: How much do I need to invest?
Answer: You need investment capital of around R700,000, freely available to transfer to an Australian bank account in your own name. Based on a 30 % equity investment, Australian banks and financial institutions will normally lend the balance, based on the rental income paying off the bond repayments. We will provide you with a cash flow analysis showing how much equity is required and what the anticipated rental will be to cover your bond repayments. You can decide not to pay off the capital loan, but only the interest, which is fully tax deductible. Australian Properties will help you with this process and introduce you to specialist consultants when necessary.

Question: Why do we only recommend certain property investments?
Answer: We select developments ranging in price from AU$300,000 to AU$550,000 and situated in the prime hot spots of Australia. This is the price range that is affordable to both tenants and prospective purchasers should you want to sell in the future. We check the reputation of the developer, builder and property manager to make sure they can deliver on their promises.

Question: What return can I expect?
Answer: Gross rental returns are around 5% based on low interest rates around 6%. Rentals are high due to strong demand because the population is increasing through natural growth and immigration. This will continue as there are many and diverse employment opportunities in Australia. Taking gearing and capital growth into account an investor can expect a return on capital invested of more than 15%.

Question: What are Australia's future prospects?
Answer: Australia is very well situated to take advantage of the next uptick in the global economy. It has a stable government, strong economy, well developed infrastructure and a skilled and well paid workforce. On top of its wealth of natural resources, Australia boasts many high-tech businesses supported by excellent educational facilities. Plus there are no looming shocks like Escom and threatened nationalisation of major institutions, businesses and natural resources. Perhaps it's time to learn some lessons from Zimbabwe.

Question: Why use Australian Properties to help me?
Answer: Buying at the right time, at the right place, at the right price, for the right reasons - that takes research - which we at Australian Properties provide to you at no cost. We also check out the developer, builder and property manager to make sure they can deliver on time and look after your investment once they have secured a tenant. This we achieve with strategic partnerships in Australia. As our head office is situated in Paarl, our regional representatives are able to do business with you locally and face-to-face.

Question: Australia is a big country - where should I invest?
Answer: People create the demand that increases the value of property - and Australia's population is growing in numbers and wealth. We undertake constant research, monitoring markets, analysing population shifts, demographics, employment opportunities and lifestyle trends to identify investment hot spots. Prime regional and capital city land is always in short supply. As a result land value increases relative to building value; a high land to building ratio guaranteeing strong medium to long term capital gain. Australian Properties will guide you to make the right investment decision.

Question: Why do I have to buy new?
Answer: Foreign nationals are not allowed to purchase second hand dwellings. Australia has a shortage of housing stock and, in order to make housing available, the government encourages foreign nationals to invest in off-plan or newly constructed homes.

Question: What are the advantages of buying new?
Answer: A new building is relatively maintenance free and is guaranteed by law against any building defects for 6 years after completion. Second hand buildings normally require time consuming and costly renovations, quite apart from maintenance and repairs. Buying new in a development will ensure your neighbour's property enhances your property value as there are no run down properties next door. A new property with all the latest mod-cons and quality fittings is more attractive to tenants, ensuring higher rentals and capital growth. Plus, you will get maximum depreciation for the first few years resulting in reduced income tax.

Question: How do I know the developer and builder will perform?
Answer: In terms of Australian law, neither the developer nor the builder receives one cent of the deposits until they hand over the keys. As part of the research the developer undertakes, he checks demand i.e. what the market wants and can afford. The builder, who must be registered and licensed with the local authority, must stick to the budgets and timelines and comply with all local regulations and laws, with attention to quality assurance. Thus they have to be financially secure to bear the cost of construction until completion and settlement.

Question: What are typical lease terms and who decides these?
Answer: The letting agency has full discretion ito the duration, terms and conditions as well as price in the rental agreement. They will advise you depending upon market conditions at the time. Typically leases are 6 months with a 6 month option. The lease will bind the tenant to the Rules of the Body Corporate as well.

Question: How much are letting fees and how is the rent managed?
Answer: Usually 5% is charged for up to 1 year and 7,5% for longer term leases. As landlord it is your responsibility to check that your rental is being paid into your bank account. Normally tenants get replaced within a week of vacating a unit, so vacancies are very low. The landlord will receive a monthly statement showing all income and expenses. Body Corporate expenses for communal areas will be reflected in these accounts. Before moving in the tenant must pay 6 weeks rent in advance - 4 weeks of that goes to the Australian Rental Bond Board, the balance to the property manager. This 4 weeks rental bond will be used to offset any loss of income and there is landlord protection insurance as well to cover any other losses. This is an early warning system of any rent payment default. Unlike SA there is a firm system in place to also protect the landlord.
Question: Will there be a requirement for any further furniture and fittings prior to letting the unit?
Answer: The units are let unfurnished, unless your want to invest an additional AU$25,000 to AU$30,000 and charge more rent. The tenant usually pays for the telecom connections as well. Holiday letting at coastal resorts will involve providing furniture and fittings, but the increased rental makes this an attractive alternative.

Question: How do I know the tenant will look after my investment property?
Answer: There is the Residential Tenancy Act which protects the tenant and the landlord. The property manager is held responsible under duty of care laws. Tenants are thoroughly screened before being placed. An organization called TICA (Tenancy Information Authority) will advise the property manager if an applicant has a history of defaults or damages. The property manager and the tenant must go together and do an Entry condition report before the tenant moves in. Before moving out,the property manager and tenant must do an Exit condition report and record any marks or damage. The property manager will issue any notices required should there be a breach of the lease agreement by the tenant. Tenants have to pay for their own power and it is in their own name, so there are no surprise bills to pay. The property manager makes 3 inspections a year and sends a report to you.

Question: How do I know the property manager will let the property and act in my best interests with maintenance and repairs?
Answer: A property management group or individual will have bought the management rights at substantial cost. They will be paid by the body corporate to look after the property and earn fees on those units that they let. Thus they have a vested interest to keep on managing the units and the property. Often they will own units too, so they will want to ensure the value of the whole complex increases.

Question: How do I ensure the Body Corporate does their job?
Answer: You will be entitled to vote for members of the Body Corporate. There is a Body Corporate Act protecting the interests of owners. The Act is enforced rigorously and, in any event, Australians are generally very law-abiding. The accounts are audited and there will be minutes of meeting available to you.

Question: What about insurance?
Answer: The Body Corporate holds insurance for the building. As an owner you must arrange insurance for fixtures and fittings. We also recommend that you take out landlord protection insurance.

Question: Do I need to get legal advice or do the contracts protect me?
Answer: The lawyer acting for you in Australia is fully conversant with the contracts and will ensure you are protected every step of the way.

Question: What do you charge for your services?
Answer: We do not charge anything for our services. The purchase price of your investment includes all costs as detailed in the cash flow analysis we will provide for your evaluation.

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