We have detailed below the basic steps so that investors are aware of the procedure and the flow of documentation.

This will also give an indication of the timing of cashflow and ultimately transfer. Even though there are a number of similar steps, every transaction is different and will have it's specific requirements that will be identified once the transaction is underway.

WE ASSIST EVERY STEP OF THE WAY

• Decide on financial commitment - make sure you have funds available in cash to meet minimum deposit and SARS requirements
• Select appropriate scheme - choose a scheme which you feel suits your investment profile - whether it's pure investment, a possible holiday home or future relocation property
• Apply for a unit in the scheme - you can nominate a unit or ask us to advise you. In any event, we will get an updated availability schedule and advise you which unit has been allocated
• You then confirm acceptance of this unit and sign the expression of interest documentation. The initial commitment fee is due now - usually a nominal amount
• You must now apply for SARS tax clearance with our assistance
• We will then ask you to collate financial and personal information as required by the Australian bank for the bond
• The sales contract and bond application documents will be delivered for you to sign and return
• You will appoint the nominated property management company so that they can secure your tenant
• You will be advise regarding bond approval
• The balance of the deposit totalling 10% is now due
• An Australian bank account is opened in your name
• The settlement/transfer and bond documents must be signed. This is usually done by giving a Power of Attorney given to an Australian attorney to sign on your behalf
• The final payment of 20% plus 5% costs must be made to settle any outstanding cash required
• CONGRATULATIONS - YOU ARE NOW THE PROUD OWNER OF AN AUSTRALIAN INVESTMENT PROPERTY
• Copies of the title deeds and bond documents will be sent to you, confirming ownership

TYPICAL RETURNS ON INVESTMENT

• Initial investment: R350 000
• Investment exposure: R1 000 000
• Low interest rates (6%) coupled with a high rental yield (5%) creates an almost zero monthly shortfall over a 10 year investment horizon
• Assumptions after 10 years:
• Capital growth: 7.18% per year
• Rand depreciation: 75% over 10 year period (From 2000 to 2010 it was 75%)
• Thus
• R1 million @ 7% for 10 years = R2 million
• Plus 75% appreciation of AU$ over ZAR: R2 million + 75% = R3,5 million 
• Return over 10 year period:
• ((Property value in ZAR after 10 years - Initial deposit - Outstanding balance/Initial deposit)*100 = Percentage return over 10 years
• ((R3 500 000 - R350 000 - R1 225 000)/R350 000) * 100 = 550% return
• Annualised return: 18.58%

COMPARATIVE CURRENCY EXCHANGE RATES VS ZAR

ANALYSIS:

• The weakening of the ZAR is the greatest when compared to the AUD over a 10 year time period.
• The weakening was also much steadier as was the case with the USD, GBP and EUR. The volatility in the ZAR is to a certain extent also evident in the AUD which could be ascribed to the commodity based economies of both countries.
• The EUR has fared second best as a rand hedge but with much greater volatility and thus risk. The current problems in the Eurozone are likely to continue for some time.
• With the current relatively high rates in Australia one could expect furthur strengthening of the AUD agains the other hard currencies and more so against the ZAR with the current political climate worsening. 

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