All Topics / Help Needed! / Non NRAS in an NRAS Area

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  • Profile photo of Anthony SarkisAnthony Sarkis
    Participant
    @anthony-sarkis
    Join Date: 2010
    Post Count: 1
    July 10, 2014 - 9:40 pm

    HI all,

    I am stuck. I have been offered a property (First time investor) $385k 3 Br 2 Bath 1 garage. It is in a complex of 104 in Northern Queensland.

    42 of these properties are NRAS mine isnt. Is this an issue? I know NRAS isnt public housing but will it affect my property growth.

    I have spoken to multiple agents and they all agree I will get bet $365 – $375 in rental. It will be costing me around $20 per week to have it before any tax benefits.

    Thanks

    Anthony

    Profile photo of BennyBenny
    Moderator
    @benny
    Join Date: 2002
    Post Count: 1,416
    July 10, 2014 - 10:27 pm

    Hi Anthony,
    Welcome aboard !! :) I just wanted to post a few thoughts that might not answer the NRAS question, but will hopefully be of some benefit to you :-

    1. Being “in a complex of 104” this sounds like an apartment – is it??
    2. If yes, then a rent of $375/wk for a $385k property sounds quite restrictive. Are you sure you will only be down $20 a week? e.g. have you factored in RE agent fees, Insurance, body corporate fees, rates, etc?
    3. Have you compared other (similar) properties in the same area, but in another complex? How do their prices/rents compare?
    4. I expect this might be in a major city (going on the price) e.g. Cairns, Townsville….

    And, in case it helps (as you are a new investor) do check out this link – it may answer a few other questions that you might not even have yet !!
    https://www.propertyinvesting.com/topic/4410491-the-big-picture-for-new-readers-especially/

    Hope it helps,

    Benny

    Profile photo of Corey BattCorey Batt
    Participant
    @cjaysa
    Join Date: 2012
    Post Count: 1,010
    July 10, 2014 - 10:43 pm

    I think Benny has identified a key issue. The yield appears to be sub 5%, which is quite low for a regional apartment within a NRAS complex. Not ticking too many boxes at this point. It might be worth playing devils advocate with this, looking at an altenative similar style security within metro Bris. How do the numbers stack up in comparison?

    The NRAS properties within the complex can play a role in valuations over the medium term, as this essentially means the complex is housing a large number of low income individuals, which may mean it can be detrimental to capital appreciation, just the same that Public Housing areas suffered until being privatised.

    Corey Batt | Precision Funding
    http://www.precisionfunding.com.au
    Email Me | Phone Me

    Investment Focused Finance Strategist - servicing Australia-wide

    Profile photo of loan rangerloan ranger
    Participant
    @loan-ranger
    Join Date: 2008
    Post Count: 13
    September 16, 2014 - 9:05 pm

    That’s not a very fair comment …. I own 10 NRAS properties, have sold many many more and have just had a number of mine and other clients, re-valued.

    Some examples

    2 bed Townhouse in Gregory Hills, Sydney – purchased 8 months ago for $370K. Re-valued at 460K. 100% of the 6 townhouses are NRAS

    2 bed Unit in Elanora Heights, Sydney – purchased 12 months ago for 595K. Re-valued at 650K . 15 of the 22 Units are NRAS.

    2 bed Unit in Enfield , Sydney. – purchased 8 months ago for 535K. Re-valued at 610K . 10 of the 24 Units are NRAS.

    2 Bed Unit in Alderley, Brisbane – purchased 14 months ago for 350K. Re Valued at 390K 16 of the 30 Units are NRAS

    2 Bed Unit in Windsor, Brisbane – purchased 14 months ago for 345K. Re Valued at 390K 8 of the 14 Units are NRAS

    To be fair and balanced, there are others in SA for example that haven’t shown much appreciation over the past 12-18 months , but the clients are 7-9K CF+ on those, so they aren’t reliant on growth to keep their heads above water. Point being – if you choose well, a property with an NRAS credit can make you good growth as well as great cash flow. NRAS of itself does not equate to growth potential being handicapped.

    To the OP; I wouldnt be buying anything ( NRAS or non NRAS) in a project with 100 + Units though. Strata Costs can get atmospheric. Try to focus on low rise or boutique sized projects.

    • This reply was modified 10 years, 2 months ago by Profile photo of loan ranger loan ranger.
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