Perhaps you have heard the political bantering about NRAS and have wondered “What Is NRAS?” More likely you have no idea and think “who cares?”. Not reading this article to the end could be a very costly mistake, because I am about to explain a government grant that you probably qualify for!

Put simply, NRAS is a Federal Government Grant offered as an incentive to property investors to provide affordable housing to low and middle income earners.

NRAS, which stands for the “National Rental Affordability Scheme”, was dismissed by mrd when first released for a variety of reasons.

• The government ‘forgot’ to ask the banks if they’d fund it… and they wouldn’t. Doh!
• The scheme was way too restrictive and properties in the scheme had to remain in the scheme (even if on sold); threatening the future value of the property if there were no buyers around wanting to be restricted to keeping it in the scheme.
• There was much red tape but this has since been simplified.
• The new scheme was not communicated/sold very well and overall the take up was pretty poor.

NRAS Has Changed

One of the many criteria we use when researching property is “would I buy it”? Before the changes to NRAS the answer was a resounding NO!

Significant improvements to the scheme – and the banks new found willingness to back it – means we believe (the changed) NRAS provides a phenomenal opportunity for the right investor and would personally be happy to invest in an NRAS approved property as well.

NRAS In A Nutshell

• Developers apply to have some of the properties within their proposed development NRAS approved
• Those properties are sold (with the NRAS allocation attached)
• The purchaser has the option of accepting the grant or not.
• The market rent must be reduced by 20% to 25%. NB: 20% of $400 a week = $80 a week or $4,160 a year.
• Grant is currently $9,140 and is increased by the rental component of the CPI each year.
• Rent is set to market rent in year 1, 3 and 7 and is increased by the rental component of the CPI each other year.
• The property must be rented to low to middle income earners who qualify.
• A single adult can earn up to $41,514 and still qualify. A couple with 3 children can earn up to $98,695 and still qualify.
• The property management is overseen by a consortium group.

NRAS Is Not Social Housing

Tenants are not chosen from a list based on the neediest rather they are chosen by a property manager on the basis of who is the best tenant.

The scheme runs for 10 years but the owner can choose to exit the scheme by either:

1. Providing a replacement property
2. Selling to a purchaser who will continue with the scheme
3. Removing the property from the scheme. If you do this you will not receive the bonus for that year. (Therefore it makes a lot of sense to sell on July 1, not June 30)

Cash Flow Bonanza

So what does this grant offer you, the investor?

1. It will greatly improve the ongoing cash flow of your property.
2. It will virtually ensure 0% vacancy (who is going to let such cheap rent go?).
3. A refundable tax rebate. The grant itself is tax free.

The Icing On The Cake

What’s most exciting in our ability to offer you the NRAS opportunity is that many of the NRAS approved properties are the very same ones we had already identified through our extensive research to be great investments – even before adding the NRAS incentive rebate. See NRAS properties featured on this newsletter!

Mega Conferences In Perth & Melbourne

NRAS represents just one of the exciting new opportunities available that we will be revealing at our “Identifying & Overcoming Your Roadblocks To Property Investing” conferences.

Confirmed conferences for the first half of 2011 are:

• Perth on Saturday 12th March (with bonus session Friday evening the 11th)
• Melbourne on Saturday 19th March (with bonus session Friday evening the 18th)

Seize The Opportunity

• I want to find out more about how the NRAS opportunity could benefit me >>>here
• I want to find out all about the Perth conference >>>here
• I want to find out all about the Melbourne conference >>>here
• Any Other Question(s) >>>here

Happy Investing,

Doug Wroe
Our Customer Care Program works for you… because investing is personal!

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