Frequently Asked Questions

VIP Properties regularly holds Q&A Forums to give our clients the opportunity to meet like-minded people and to ask any questions they may have.
The following is an extract of some of the questions that are regularly asked by people who come to the forum for the first time and have not as yet purchased an Australian investment property:

Q. "So what does VIP Properties do, exactly?"

VIP Properties provides all the services and support required to help New Zealanders/kiwis and international clients acquire residential property in Australia. We regularly travel to Australia and drive thousands of kilometres to identify the best locations and value "hot spots" for our clients. When we find the ideal lot we will negotiate with the developers to secure the site for you and then ensure that a top quality residential property is built. Often when seeking out great locations and land we find pre-built or pre-owned/near new property that may offer a client better benefits than building due to a stressed vendor. In this case we will negotiate on behalf of our client to secure this property. Finally, we appoint property managers with proven track records to professionally manage the property on your behalf. In addition to this we provide ongoing service and support, mortgage approval assistance from NZ and Australian finance institutions, and assistance with tax issues.

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Q. "Can't I just fly to Australia and buy a property myself?"

Sure you can - and many people who are experienced in property investment in the New Zealand market do just that. However, in the same way that you can be your own lawyer in a trial, it does not mean that you should be (for obvious reasons). The whole purpose in property investment is to achieve the best value growth possible and this involves an intimate knowledge of the Australian property market. We have met many people who, after vacationing in Australia, purchased an investment property themselves only to come to us later to ask why the property is not growing in value as strongly as they hoped it would. In most cases it is because they acquired the wrong house in the wrong area for the wrong price. Then there are contractual differences between NZ and Australia that need to be kept in mind, often resulting in people being trapped in a contract with little or no chance to change their minds should they wish to do so.

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Q. "So what does VIP Properties do that I can't do?"

It must be understood that we are very focused in the fields of location and property selection with over 20 years of combined experience. We use the services of other focused experts in the area of finance, mortgages, tax, property management and ownership structures. We know what the indicators are of value growth. We know where many of the best areas are to buy, and where to avoid. We know what a fair purchase price is for an area (thus avoiding over capitalising on a property). All in all, we know the Australian property market intimately.

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Q. "Where is the best place to buy in Australia?"

While purchasing in the right area is very important, a successful investment involves more than just the right area. Demographics, market trends, rental yields, build quality and purchase price must also be taken into account. More importantly your unique situation will also provide direction as to where the best area is to buy for you.

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Q. "What about investing in an apartment?"

As a policy we don't generally like to invest in apartments simply because experience shows that value growth in property occurs in the value of the land rather than the building. However, this is a very general statement and different people have different needs. For instance, if you are wanting to buy now and use the property for yourself for a few months of the year, then your purchase is probably more motivated by lifestyle than by wealth generation. Many people want to reduce their tax burden and invest in an apartment for this reason. However, if you are looking for the highest value growth and wealth generation possible within a shorter period of time, in our opinion a residential house is the way to go.

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Q. "Do you take a fee?"

Yes our clients pay a fee to gain full access to our contacts, knowledge and support. From this point our services are free and supportive to our clients. When buying land and building with our help there are no other fees from VIP to our clients. When we identify a pre-built/pre-owned property that clearly offers our clients better advantages than buying land and building, our clients have the option of us negotiating and securing this property on their behalf. In this case there will be a further fee however this would be discussed with all parties prior to the transaction proceeding. In short we do receive fees and payments for properties that we find and our clients buy into.

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Q. "I'm not sure of the viability of properly managing the property from here in NZ"

It does make it easier when one considers that the letting laws in Australia are generally more in favour of the landlord than they are here in New Zealand. We have built close working relationships with many excellent property managers in Australia and we play an active and ongoing role in managing the property on our client's behalf. In the end, the only difference between rental management of a NZ property and an Australian one is space, and we will fill that space. Remember, we regularly travel to Australia to ensure that your investment is well looked after.

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Q. "How do I know if I can afford it?"

While it is possible to buy an investment property for little money down and as little as $50 a week, it more often than not involves a property that you wouldn't want to buy anyway and is unlikely to grow in value at the rate you expect. Everyone's situation is unique and so a free consultation is required to determine your financial eligibility to purchase the right Australian investment property that will perform to expectations. Even if you can't afford it right now, we can help to formulate a plan for you to reach your goal in the future. Generally speaking, if you earn a decent income and own a property that has increased in value since you purchased it, it may be worth your while to give us a call. But don't leave it to yourself to analyse - you may actually be in a better financial position than you think.

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Q. "Can you help with the mortgage?"

Yes. We have specialist mortgage consultants who can help you to secure a mortgage with Australian and New Zealand banks and lenders. It is recommended that you gain pre-approval for a mortgage before you try to source the investment property. When the ideal investment is available for purchase you will be competing with other buyers and so a pre-approved mortgage will help you to act speedily and ensure that an ideal opportunity does not slip through your fingers.

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Q. "Come to think of it, why should I buy in Australia at all?"

It is widely acknowledged that value growth in New Zealand is slowing and that it will take some years before income levels rise and population growth increases to the levels required to trigger another rise in property values. In the end it comes down to the numbers: The property boom is still alive and well in certain areas in Australia and there is no reason to miss out if you are a serious investor. Many of our New Zealand clients are purchasing property in Australia to add diversity to their portfolios.

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Q. "Should I buy now or should I wait?"

Most industry bodies agree that supply and demand pressure is increasing because new housing development is currently running as high as 40% plus, below underlying demand while migration is increasing steadily. ANZ Bank reported recently that Australian economic conditions have never looked better and that a marked shortage of housing will intensify pressure on rentals and established house prices. From a value growth perspective, less houses on the market usually means stronger competition between buyers, resulting in increased selling prices. For investors this is good news and means that the time for acquiring property could be opportune for the astute investor.

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