Jo Brown from NRAS Real Estate shows us the ins and outs of the National Rental Affordability Scheme in this webinar. It’s goes for about an hour and a half and covers all that you need to know as well as a really detailed look at some numbers that really show why NRAS is a compelling investment.
If you’d like to know more about investing in NRAS, you can contact me for more information.
NRAS provides a fantastic way to invest in new property in potential growth areas in a way that actually puts money into your pocket! With most new properties being negatively geared, NRAS is a great option for investors to turn that around and provide a positive cashflow investment.
In this webinar, with Jo Brown from NRAS Real Estate, we cover the National Rental Affordability Scheme in great detail and I highly recommend that you take the time to watch the entire webinar if you are wanting to gain an in-depth knowledge of the scheme and see the real power of the scheme.
Here are just some of the key points covered in the webinar:
The Basic Premise of NRAS
The basic premise of an NRAS property is that the property must be offered for rent at 80% of the market rental value and in return the investor receives a tax free rebate of $9981 per year for 10 years, guaranteed!
When did it start and why?
The scheme commenced in 2008 and is aimed at providing high quality, affordable housing for key workers, such as nurses, police officers, service industry workers. The scheme looked to address issues of the shortage of affordable rental housing in key areas of growth.
Who can live in an NRAS property?
The actual occupation of an NRAS tenant is not restricted, but there are thresholds of maximum salary that must be taken into consideration as well as rules related to ownership of property. For example a single person can earn up to $45,496 to get into an NRAS property. A couple or sole parent with 2 children can earn up to $93,079.
Once a tenant has been approved there are allowances for increases in salary that make the scheme fair for participants.
Who are the parties involved?
- Investor – The investor much purchase a property that has been approved for NRAS.
- Consortium – An approved NRAS participant body who manages the NRAS compliance on behalf of the investor. A yearly fee is paid to the consortium to do this. The fee an range between $650 to $1000.
- Property Manager – An approved property manager (can be a real estate agency with NRAS approval) who manages the tenancy side of the arrangement. The property manager is paid a management fee which is usually a little higher than the standard management fee to cover additional reporting requirements for NRAS.
- Tenant – An NRAS approved tenant who meets the salary and other requirements throughout the tenancy.
How is the rental amount determined?
An independent valuer is arranged by the consortium (and paid for by the property owner) to value the property at years 1, 4 and 7 of the scheme. The market rental is determined from this valuation and then the property must be made available at 80% of that market rental value.
How is the money paid to the investor?
Rental income is paid by the usual methods. The difference with an NRAS property is that a tax free rebate is provided, by both the federal and state governments as part of the annual income tax return. The rebate is provided for 10 years from the start of your NRAS tenancy commencing. It is indexed each year and currently the total rebate is $9981.