I have to say, the attacks on NRAS as slums of the future are a little unfair. There are only three types of property that can attract NRAS1. Completed Spec Home2. New Construction Home/Townhouse3. Units/Apartments. Except for small unit/apartment developments, concentration levels for NRAS are limited to 30%. There are only a very small number of…[Read more]

No problem Galen. NRAS is really poorly understood unfortunately, so I'm happy to be able to provide some broader perspective.  The tax benefits are what everyone is focusing on, which is understandable of course- after all, this is an investors forum, but for the lender being asked to provide finance against a security which is being entered…[Read more]

Prices have definitely been jacked up, no question. Easy to verify with a property search.1/3 of the rebate is lost in fees. So that 91K (Qld!?!) is closer to 60KPrices Jacked up-  thats where valuations are key.  This problem isnt exclusive to NRAS property. 1/3 lost in fees-  its a broad statement but not entirely accurate- depends on which NR…[Read more]

keiko wrote:
Bloody valuers, I would Keep it with the same agent, she sounds like she will work hard for you to get this sold, the agent may be able to make the change to the other properties that she sold by logging onto RPData and making the changes, that is as long as they have sold and are not still under contract, (I think this is possible…[Read more]

The only negatives to Cash Flow positive properties are the perceived negatives.1. the properties must be cheaper and therefore are likely to be in less desirable areas and show less growth.2. The types of properties that fit CF + profile.  Student Accomodation, regional property etc. May be more difficult to borrow against and LVR's will be…[Read more]

The ATO has passed a ruling this week …. National Rental Affordability Scheme Amendment Regulations 2010 (No. 1) Select Legislative Instrument 2010 No. 78 I, QUENTIN BRYCE, Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following Regulations under the National Rental…[Read more]

I keep hearing that the majors are about to start doing NRAS deals. Seems the Head Lease Agreement issues have been ironed out/amended, and some of the leading consortiums have brought the relevant Govt depts and banks together to sort it all out.

Dont know if there are too many LOC's where Capitalising interest is possible now. Still, easy ways to trick most the banks systems. Just set up a direct debit to draw the interest payment out of the loan and back into the same account. Most the lenders systems will recognise the minimum repayment has been made, and in effect you are capitalising…[Read more]

Thats still possible shamematt. You'll still have access to equity but its just stricter now.  No ones saying you cant get a Line Of Credit for legitimate purposes or access equity for legitimate purposes.  That hasnt changed.  The real difference now is that  banks will no longer give anyone money with a "no questions asked" kind of approach, jus…[Read more]

P.S does anyone think the banks will repeat the same mistakes one day and credit will once again become easy to get? Even if thats years down the track?[/quote]Shanematt- the short answer is NO for the next few years at least.  Cost and Supply and investor appetite will combine to put a lid on the availability of money/credit for the next few…[Read more]

What about finance?I keep hearing that very few lenders will touch these.Who are the lenders that will ?Are they available through third party or only through select branches?What LVR's will they look at?How are they assessing serviceability? ie do they take 80% of the discounted rental ( which is already discounted by 20-25%) PLUS 100% of the…[Read more]

JPSThe biggest issue seems to be finance.  Can you assist with the following?What lenders will accept NRAS approved properties as security? Are there any LVR restrictions?How do they calculate the NRAS incentive for serviceability?

shanematt, you're going to have a really tough time getting any lender to let you do this anymore. Cash Out is pretty heavily policed these days. The LOC you have in place is fine- you got that set up in the past where cash out wasnt scrutinised so closely, but when your LOC hits its limit (and it will eventually) and you go looking for more money…[Read more]

The closest you will get to achieving this is to invest in NRAS approved properties. Because of the federal and state tax concessions attached to the NRAS programme, they offer BOTH neg gearing and Cash Flow positive benefits in most cases  ( I know that sounds too good to be true, but Google NRAS and do some reading) There are lots of sites that…[Read more]

A 95% strategy is completely unnecessary given your fantastic position.  At 95% LVR, you wont easily find cash flow positive properties either, so you will have to top up the monthly mortgage payments, possibly by several hundred dollars per month. This will also limit your borrowing capacity. No need to rob Peter to pay Paul.  If you have a s…[Read more]

TerryThere are a couple of lenders with a LOC who will approve the full 90% and just retain the funds until the borrower provides the COS for the investment purchase/purchases. That's just as good as having the money sitting there in redraw waiting to go, I think.

Do as Terry suggests, but consider taking a LOC up to 90% of the value of the PPOR so you are only repaying what you draw down.1. Pay cash for a 500K PPOR. If you are a First Home Buyer you are exempt from stamp duty, and the FHOG will cover your application and legal fees easily.  You should be left with several thousand dollars from the FHOG.  2…[Read more]

1. If the buyer has exchanged you can take your 5 or 10% and put it back on the market2. Stick with this buyer and serve a notice to complete ( your solicitor will do this for you) and charge penalty interest. Whatever you do- get your solicitor to seek an extension on your purchase immediately- buy yourself as much time as possible.

HopefulThe situation you and your husband are in is regrettable, but you are literally at the crossroads and there are only two options; pay up or sell up.  Your bank has already extended you several months of grace, and they are not obliged to. Soon enough they will call in your loan and you will lose the property.  Regarding refinancing to buy y…[Read more]