Hi Allister,

You might also want to consider refinancing – we covered this last week in our company blog. The discounts available from the headline interest rates have increased in the past several years – so you may for example be able to negotiate a .70% reduction on a published rate.

Best of luck!

Hi Brady,

An NRAS property is one that has been approved for participation in the National Rental Affordability Scheme. This is an Australian government program to increase the stock of affordable rental dwellings across Australia by encouraging private investment in new affordable housing.

Basically, the owner of the property agrees to let his/her property at 20% below the market rent to approved tenants. In return, the investor receives a mixture of incentives from the federal and state governments in either the for of a tax offset or payment. This incentive is received for ten years and is currently valued at $9,981. In normal cases this more than makes up for the shortfall in rental income, and it means that in some cases the NRAS incentives could finance up to around 1/3 of the purchase price of the property.

NRAS properties have been popular with some investors over the past couple of years, although you of course need to do all your normal due diligence as with buying any normal property.

There's plenty of NRAS info available on the net. A good place to start is the federal government's site: http://www.fahcsia.gov.au/our-responsibilities/housing-support/programs-services/national-rental-affordability-scheme

Cheers,

Melanie

Hi Derek,

You're quite right – you can opt out of the Scheme at any time. My understanding is that if you opt out part way through the year you receive a pro rata payment of the incentive, but I would have to check this with some of our staff to be 100% certain.

One of the good features of NRAS properties is they need to be located in government identified areas with high rental demand. While this is no substitute for proper due diligence, it can be a great booster for the rookie property investor in terms of narrowing down what can otherwise be an overwhelming array of options. (Of course as DG Hayes points out, NRAS properties have a place in an experienced investor's diverse portfolio too!)

Not wanting to blow my own trumpet here but I worked with our team of property investment and financial advisors to compile a pretty comprehensive overview of NRAS for individual investors. There's links to the relevant government sites as well as answers to common questions in clear, plain English – I hope some readers here find it useful.  http://onyx.net.au/nras/

Regards,

Melanie

Hi All,

Just wanted to clear up that the NRAS tax offset is a refundable tax offset – that means that if you pay less than $7,143 in tax, you actually get money back from the government rather than lose out altogether. So for example, if would normally pay $2,000 in tax without purchasing an NRAS property, you would get $5,143 back from the ATO at tax time. You can read more about it here: http://onyx.net.au/nras/nras-investment-returns/ or straight from the horse’s mouth here: http://www.ato.gov.au/businesses/content.aspx?menuid=0&doc=/content/00179876.htm&page=4&H4

Cheers,

Melanie