Additional Information
The particular business ethos prevalent in Karinya Homes is totally supportive of the ongoing relationship with our investors. As with any growth investment, the objective is for the investment to increase in value. It is critically important therefore, that before offering an allotment to our investors it must fit our Investment Criteria and be of sufficient grade to enable good capital growth while maintaining adequate income.
While we are always refining our criteria to provide the best combination of results, these factors will remain as high importance;
- Allotments should be within a quality, well planned community or estate.
- The estate should be within a 5 kilometer radius of proposed or existing local infrastructure such as schools, shops and public transport.
- The estate should contain or be within close proximity (1,000 metres) to parks or family relaxation areas.
- Covenants on the estate should be of high, minimum standard and not allow the construction of dwellings under a total area size of less than 192m².
- The home should be constructed of face brick, rendered brick or rendered masonry while the roof shall be of tile or Colorbond® material.
- The home should be a lowset, four bedroom residence with an enclosed, double lockup garage and Al Fresco style entertaining area under roof.
When our developers offer a parcel to us for consideration we conduct an area analysis which includes the examination of submissions to council for Development Applications (DA’s) for commercial and industrial areas contained within a 10 kilometer radius. In many instances we look for situations where residential development is ahead of these DA’s and we determine the potential for an area to support the local community with jobs and entertainment within a five year period. This approach allows our investors to capitalize on the growth of the area itself and increases the potential capital gain.
Where an allotment falls outside the investment criteria, a specific report will be provided by the research department outlining its potential to the directors. In this instance the directors will draw on their experience and make a recommendation.
All investments carry with them an inherent degree of risk. An investment into residential property is no different. The following is not an exhaustive list of things you should consider before making an investment in this sector.
If unregistered allotments are offered for sale, the delay until settlement could be quite substantial and in extreme cases may exceed 12 months. Settlement may be affected by forces outside the control of Karinya Homes and therefore settlement may be delayed.
After settlement, commencement of construction may be hindered by any number of factors including the release of council approved plans.
Inclement weather may delay the construction of your home. If so the interest may be higher than you had originally intended.
Tenancy Risk. On completion of your home, the property management company may be unable to find a suitable tenant. This will cause your property to be vacant and no rental income will be available. In many cases insurance is available to underwrite the possibility of this occurring. Please see your adviser for more information.
If gearing has been utilized, mortgage interest rates can affect the potential internal rate of return (IRR) for the investment. The benefits of negative gearing are generally only of value where income tax exceeds the amount of interest payments. You should consult with your tax adviser regarding the potential benefits of negative gearing.
Management risk is present on each project. It is now a legal requirement for the builder to mitigate this risk through various insurances. Public Liability Insurance ($5,000,000) and construction security lodged with the BSA for works in progress up to $10,000,000 is in place. This amount will be automatically increased as required and covers the investor in the event of the builder encountering difficulties.
Sector Specific Risk occurs when you are not sufficiently diversified across the three sectors of cash, property and shares. If you are fully invested in a specific sector, you will be exposed to any downturn in that sector.
A final inspection is carried out on your investment approximately three (3) days prior to handover. While you are most welcome at the final inspection, this will be attended by a quality assurance officer and the property manager where an entry report will be completed. On handover of your investment either yourself personally or an appointed representative will be required to take possession of the keys, operating manuals and other miscellaneous items. Handover will only take affect where the builder has received the final payment from you or your selected financial institution.
Your property asset is completed to a level of finish where it is ready to occupy and a Certificate of Occupancy is provided to the bank. This level includes but is not limited to, all of the following:
- Painting
- Carpets
- Wall & Floor Tiles
- Security Screens
- Appliances
- Landscaped Gardens
- Turf
- Driveway
- Window Coverings
- The standard REIQ Land Contract and standard MBQ Builders Contract carry with them, cooling off periods relevant to each. You should seek the advice of qualified legal counsel prior to signing any contract.
- An investment into residential housing is considered an illiquid investment in that the investment may not be easily redeemed at short notice. Ideally this type of investment has a time horizon of approximately 5 -7 years although this may change, relevant to client needs and objectives.
Every care has been taken in the selection of each allotment offered for sale however neither Karinya Homes, Australian CPI Group nor any of their agents or employees guarantee the performance of the investment. As the investment is considered long term, performance should be calculated over time horizons of not less than 5 years.
Termination of Application
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You may terminate the application at any time within the 14 day application period without penalty.
Should finance be declined at any time, a refund of 90% (unless otherwise negotiated) will provided upon receipt of the letter from your financier.
Should you choose to terminate either contract after the application period has expired, 50% of the application fee will be retained by Karinya Homes as a handling fee.
If you reapply within 6 months of the application date, a 50% discount on the application fee will apply.
After the cooling off period and upon unconditional finance approval, you will be unable to terminate either contract.
If you have a complaint it should be forwarded in writing in the first instance to your adviser. If your adviser is unable to resolve your dispute within seven (7) days or if you are dissatisfied with the result you should immediately forward your complaint to Karinya Homes Head Office, for the attention of “Client Relations”. Should you still be dissatisfied or unable to resolve your dispute within a further seven (7) days you should provide all details to the BSA in your area and seek legal advice.
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