Alliances with International real estate and property marketing firms

AII has formed strong alliances with international real estate firms, property marketing specialists and property investors living out of Australia.

With our extensive experience in lending to non-resident and ex-pat investors, we are in a position to provide investors with a fast response from initial application through to property settlement and to any subsequent adjustments or rearrangements that is required.

 

Finance may be arranged for International Investors for the following purposes and situations

• Full 100% funding using additional securities
• Ex-pat loans to 97% with single securities
• Up to 80% lend against residential properties
• Up to 80% for land and construction
• Up to 70% for commercial properties
• 100% lending against term deposits as security
• Residential units, houses, town houses
• Student accommodation properties to 80%
• Hotel rooms to 80%
• Serviced apartments to 80%
• Low Doc lending to 80% for self employed
• Loans with guarantors
• Company, Individual and/or Trust borrowers
• Landlords insurance agency
• Repayments can be interest only or principal and interest
• Interest rates can be variable or fixed, or a combination.
• AUD$ and Multi Currency loans

Refinancing

Many non-residents have invested in properties in Australia. Because the values of most properties have increased through time and with current favourable foreign exchange rates, there is never a better time to unleash the equity in your Australian property. In order to take advantage of opportunities available in the market place, AII can assist in providing credit lines to investors, based on equity in your properties in Australia.

A guide and explanation of terms for Non-Resident purchasers

AII have assisted many overseas buyers in financing quality property investments in Australia and New Zealand. Like most countries, Australia has certain restrictions on foreign investors, but basically, if you are looking to invest here, approval is usually granted if you are purchasing a new property, either complete or under construction.

As an introduction

Real estate can be purchased and financed by anyone who is not an Australian citizen or permanent resident provided certain requirements are met.

Under Australia's Foreign Investment Review Board (FIRB) rules, a foreigner needs permission from FIRB before they can purchase residential property in Australia. This approval will be sought by the developer or the property real estate agency. Permission will generally be granted if the purchaser buys a property in one of the following ways: buying off-the-plan (or during the construction phase) or when the dwelling is newly completed provided that it has never been occupied or sold.

The purchaser can buy a house/land package, an apartment, or a townhouse in this manner.

When a person buys a property, the Purchaser can pay the full amount for the property, or borrow part of the purchase price from a financial institution. In the latter case, in exchange for the loan, title deeds for the property would normally be held as security by the financier. This is called a mortgage.

Ownership

Residential property in Australia is usually freehold, unless it is in Canberra (Australian Capital Territory). Freehold means the buyer owns the house and land in perpetuity (it remains in that person's name 'forever'). In the Australian Capital Territory, the land on which the house or unit is located is leased to the Purchaser for a 99 year period under a 'Crown Lease'. At the end of that period, the Crown Lease will usually be extended for the payment of an administration fee.

The owner of freehold land or lessee under a Crown Lease (or their family) can live in the property or rent it out. The owner or lessee can also sell the property, gift it, or it forms part of their estate at death.

Land Title

A 'title deed' is a term used to describe a document relating to the ownership of property. It is usually held by the owner. However, if a loan has been obtained using the property as security (and secured by a mortgage), the deed will be held by the lender ('the mortgagee') and the mortgagee will be named on the deed until the loan is repaid in full. In all Australian jurisdictions, the ownership of land is registered under a title registration system. That system also records the 'interests' including mortgages.

Strata Title

Strata Title usually refers to multi-unit developments on one block of land, commonly known as units and townhouses. As they share common property, their ownership is governed under different rules to those for houses. They have a plan of subdivision, called a strata plan, which is registered at the Land Titles Registry. Under this subdivision each unit or townhouse is registered separately and individual titles are issued for each unit or townhouse in the plan.

An executive committee representing the owners corporation (made up of all unit owners) is set up to manage the common affairs of all the owners. Each owner will contribute towards a strata levy which will pay for managing the common property and meeting recurring capital expenditure.

Conveyancing

Conveyancing is the legal term for transferring legal ownership of title from one owner to another. This is the process that is undertaken when a Purchaser has made an offer for a property and it is accepted by the Seller. This process is traditionally carried out by solicitors or licensed conveyancers. The timeframes for such processes can vary depending on the urgency and circumstances of the transaction. Generally it takes four to six weeks from the time contracts are entered into (known as 'exchange of contracts) to completion of the purchase when the Purchaser will take possession of the property. It usually takes between 6 - 8 weeks to complete a purchase from the time a buyer and seller agree on a price except in the case of purchasers of properties which are in the process of construction. Such purchases need to await completion of construction and timing will depend on the construction period.

Australian Property

Quality residential real estate has long been considered essential to a balanced investment portfolio, and for obvious reasons - it has proven long term 'above inflation' capital growth; provides inflation proof rental income; can attract significant taxation savings courtesy of the Australian Tax Office*; and allows for a dramatic acceleration of net wealth through the benefits of leveraging - accumulating compound growth based on the original value of the property, not merely the growth of money invested to keep it.

Common mistakes non-residents can make when dealing with banks directly or through inexperienced brokers:

1. You directly approach one or two lenders who do not best cater for non resident/expat applicants. Outcome - Your lending application is declined or you require substantially more funds and costs then should have been necessary.
2. You deal with a broker who does not understand the intricate requirements of non resident/expat applicants and lenders Outcome - Your lending application is declined, you experience significant delays, and/or require substantially more funds and costs then should have been necessary.
3. Your application is submitted to a lender whose policy and conditions significantly reduce your borrowing capacity. Outcome - You are unable to lend as much as required, possibly buying a lesser standard property which impacts your rental income and possible future capital gains.
4. You underestimate purchase costs and loan funds available for settlement. Outcome - You require more cash injected into the transaction or you rescind the contract and possibly face a claim for damages, including forfeiting any deposit.
5. You select a product simply based on the lowest interest rate. Outcome - Ongoing fees and charges may mean your total payments are more than a product with a higher rate and more flexibility.
6. You refinance without considering all associated costs. Outcome - Any benefit you thought would be achieved by refinancing is negated and you may find yourself in a worse situation.