NRAS A NO GO ZONE ACCORDING TO CLIENT ‘S EXPERIENCES ………………. I am Often Asked if I would buy an NRAS property. I can honestly say , I would rather stick a fork in my eye rather than buy an NRAS property.
As a professional investor I would never Consider a property Simply Because you receive some extra tax benefits.
For Those of you saying “what is an NRAS property ? ” Let me quickly explain. It’s the National Rental Affordability Scheme. If the name alone does not make you run, then the word “scheme ” surely should.
Let me go into ” the scheme ” a little further. You, the investor , buy a house and land package NRAS That has been approved.
Mistake number one : you have possibly just been ripped off on price by your ” adviser” Often as the developer pays kickbacks to advisers , mortgage brokers , accountants and property companies for selling These types of houses . They can be as big as $ 50,000 per house . This kickback falsely Increases the median house price of the area as well .
Did you notice there is no negotiation on price ?
Mistake number two : the property is let out to people who can not afford market rent . Essentially you have people on pensions , welfare and / or very low -income earners living in your brand new property . We have tens of Thousands of people with good paying jobs, wanting to get ahead in life That can not afford to buy a new home to live in, yet These properties are let to people who can not afford the basics in life . I am sure there are some genuinely nice people who need to be supported by our government and I do not have a problem WITH THIS, but why are they rewarded with a new house or unit?
Why would not the government make it more attractive for home buyers and investors to buy new properties , leaving the more established properties For Those Needing the assistance?
I am 38 years old and my home was originally built in the 50s With The extension built in 1982 .
So to make this ” scheme ” attractive , the government Allows you claim more deductions on the property than You Could normally . Approximately $ 10,000 per annum more .
The break up is made ​​up of the Following:
• $ 7.486 per annum offset tax – after spending Countless hours on the phone to the ATO it is now unclear Whether this is a gross or a net number, either way , it does not change my mind on NRAS .
• $ 2.495 per annum cash rebate .
The property must be approved to be an NRAS property and let out to a government -approved tenant for a 10 year period. The rent charged is Calculated at 20 % below market rent and adjusted with CPI .
Some thoughts eats flying into my mind straight away:
• Rents in Australia have Generally Increased a lot faster than CPI of 3 %, the rents on my own properties are currently Increasing Between 6% to 12 % per annum.
• What Happens If They do not pay the rent ? How do you get them out ? Tenancy laws are tough enough to get bad tenants out let alone government- backed tenants. I’m sure the tenancy tribunal would Favour the landlord here over making a low- income earner homeless . Not.
• What are the capital gains prospects of an area drowned in NRAS properties ? Potential buyers would run for the hills rather than live in This area . Have you ever heard of anyone selling an NRAS property for a profit ? I’m in the game and I have not .
• If you decide to sell before the 10 years is up , then you are limited to selling to investors only , limiting your potential buyers to acerca 30 % of the market .
• Of all the NRAS advisers I have spoken to , the majority of them own one NRAS property. If They are such a good investment , then why do not they each own 10 plus ?
Now if that Does not make you change your mind, how about this good news story .
In a medium density development in Sydney where almost 60 % ( around 40 units ) of the development was sold to owner occupiers and investors for a pretty penny , the developer then Became cash strapped and had to sell a property fast so company came in and struck to deal with The developer. The remainder of the units were approved for NRAS and sold 20 % cheaper than the Earlier sales and investors snapped them up with NRAS approved tenants moving in .
As a Consequence , the sales price of Those units are now down another 25 % in value. Great deal ? I think not .
Nice to know the so called “property company ” who recommended These units as an investment were looking After their clients best interests.
Now before you jump down my throat , I have heard of the programs Also That allow police officers and other government workers to live in. Their properties but honestly , what police officer would want to live in. These Neighbourhoods ?
Now do not let me deter you from exploring this as an option , I just like to make sure That as investors , you have my honest opinion .



About ljgrealestate 据联大

Removing the Hassle from Sales and Rentals across South East Queensland. Aim to Empower other like minded Property Investors. L J Gilland Real Estate is a prestigious boutique agency specializing in Property Investment Management Services and the Sales of Investment Properties with tenants in place. Comprised of a top performing group of handpicked specialists, our Agents proudly serve Property Investors in Queensland. Since 1996 our Agency has demonstrated a genuine enjoyment of working with people, developing long-term relationships and delivering on the promise of great service. Carlos and Linda Debello offer property investor's the confidence to sell and lease in any market. We provide comprehensive market appraisals, exclusive multimedia marketing campaigns, and knowledgeable, highly personalized counsel on all aspects of real estate. Our Property Management Team is equally considerate, offering investors with in-depth advise, well-researched rental valuations, and highly professional rental management services. Carlos’ direct mobiles are 0400 833 800 & 0413560808. Linda’s mobiles are 0409995578 & 0414978700 (prefer email contact for Linda). Office 07 3263 6085.
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