NRAS Opportunities in SE QLD

This is the latest Property Solutions Development and the only that contains NRAS. It is a mixed use development with a village atmosphere and integrated with Rail and Bus and located close to the airport and linked to the CBD via the new M7 Tunnel. We are running NRAS seminars and these are informative nights and we am certain you will enjoy the evening. What is NRAS? NRAS is a government initiative that over ten years will provide participating property investors with a subsidy of over $100k - tax free. NRAS is an abbreviation of the National Rental Affordability Scheme, introduced by federal and state governments. Essentially, investors that participate in the NRAS scheme, agree to rent their properties for 75-80% of market rent and, in return, receive tax-free government subsidies of about $10k per year for ten years - this far exceeds the extent of the rental discount. With subsidies of around $100k+ (while the subsidy is currently a bit under $10k pa tax free, it will increase in line with market rents), there is understandably considerable comment, and this has grown in recent months. Positive comment has (obviously) focused on how investors can benefit from the tax-free government grants. There is more on this below. But there has also been some negative comment, as might be expected with any initiative, particularly ones that might seem "too good to be true". For those concerned about the quality or price of NRAS properties, the recommended approach is the same as for any other property - obtain research. Like any properties, some NRAS properties are better value than others. The best are very good value (and they should be the same price as otherwise identical non-NRAS properties in the same development). Attributes of NRAS Properties NRAS will not appeal to those seeking the "cheapest" property in an area. This is because: - the government will not provide the NRAS accreditation unless the properties meet or exceed specified minimum quality standards, so there will typically be properties of lower quality that are cheaper. - the properties must be new, so they will naturally be more expensive than older properties - there is an additional (modest) cost to developers in going through the government approval process, which developers can reasonably expect to recover. - the properties will not be discounted, because they are in high demand from investors, and supply is limited (only 50,000 NRAS subsidies have been budgeted for nationally, and the rental demand is estimated by government at 1.6m) While investors should be prepared to pay a fair price for an NRAS property, they certainly should not expect to pay an unreasonable price, and do not need to. Comfort with NRAS can be found from reading the government-issued NRAS Policy Guidelines (over 40 pages) - for a copy email us Financial Implications. For those that are comfortable with the NRAS concept of $100k tax free over ten years, we have some of the strategies that we have been working with over the last year or so. The strategies revolve around how the NRAS subsidy can most effectively be utilised to benefit clients. The subsidy started at $8k pa and has increased in line with market rents. These differ across states, but in recent years the increase has been almost 6% per annum in most regions and the NRAS subsidy has now risen to a bit below $10k pa. You might therefore reasonably expect the total NRAS subsidy to be in the vicinity of $120k over the ten year life of the scheme, tax free. Not only is this additional income stream tax free, but it is also guaranteed, even if the property is vacant, thus reducing cash flow risk should the income stream be intended for other purposes. {Note that the subsidy will not apply if the property is vacant for more than 13 weeks of the year - however, this possibility is extremely remote because there are only 50k NRAS allocations budgeted for, they are not allocated unless they are in locations of excess rental demand, and the properties are in high demand as they are rented for 75-80% of market rent; in practice, the government-approved NRAS rental managers have a queue of eligible tenants waiting for a property to become available, so not only do the properties have very low vacancies, but the property managers can select the best quality tenants from an extensive list} In some cases on the property can be cash flow positive even before the NRAS subsidy is received (depending on the marginal tax rate of the investor, and the location of the NRAS property). We will discuss what is available at the seminar. This means the investor would have the full $10k per annum to use for other purposes. In other cases, while the pre-NRAS returns involve a cash outflow, after the NRAS subsidy is received there will still be surplus funds available. The Seminars on NRAS properties available will be held at Nundah on • Thursday 8th November @ 6.30pm • Wednesday 14th November @ 6.30pm • Thursday 22nd November 6.30pm • Sunday 25th November @10.30am • • and on the Gold Coast at Broadbeach • Wednesday 28th November @6.30pm You are welcome to call John McAuliffe on 07 3848 1088 or email or contact us through our websites.