Cashflow Positive New Homes - NRAS Allocations in Adelaide

NRAS Allocation Grants of $8,672 Tax Free every year for 10 years to Eligible Investors on properties in SA.

Turn a property Cash Flow Positive whilst still having the benefits of negative gearing.

Limited Allocations left

Hi Rob

How is you group coping with the initial ATO ruling last week that the Tax credits wont be available to individual mum and dad investors only to Companies and Charities ?

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.

Thanks Richard, That confusion relates to structures where a head lease is involved; ours are straight freehold transactions.
"To enable the tax offset to flow to owners/investors involved in head leasing arrangements, the Department will put in place a manual process for issuing Refundable Tax Offset certificates in a format that the Australian Taxation Office has indicated will meet their requirements to enable the offset to be claimed by the NRAS dwelling owner tax-free."

Having said this, all investors are required to get their own tax advice.

Rgds,

Rob

Yes totally agree investors should get their own Tax advice.

Be suprised how many lenders have said they will not touch the scheme where a Head Lease is involved.

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.

Rob

Do you have a website or other info re your properties? I havent seen much around for Adelaide. 

PS The head lease for QAHC is pretty onerous and I would caution anyone to also get legal advice before they go ahead.

thx

Hi Rinnia,

www.buildingassets.com.au will be live in about 2 weeks time. The prime focus of this group will be to match up NRAS grants, including all compliance matters relating to the grant, with brand new investment properties in Adelaide.

The builder will be announced on the launch of the website.

Rgds,

Rob

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 NRAS tax free incentive, or 80% across the board?

Thanks for the question.

As our grant is attached directly to the property, with no head lease or similar to complicate things, we haven't had issues with finance to date.

What we are hearing from credit departments is that they assess the 100% of market rent, but do not take into account the NRAS payment.

All of our modelling is done on between 80% lvr to 90% with LMI, which shows a positive cashflow at the end of the year of about $120 per week on a $300k house.

<moderator: delete advertising>

Rob

Hi Rob,

Is it possible to look at a list available properties now or do we need to wait for the website?

Thanks

Gary

Hi Gary,

Website is currently being populated and finished, but it will be at numerous developments across Adelaide.

Rob

Hi

isnt this a finance forum?

Matt

Investment and Home Loan Specialists:
http://investment-mortgages.com.au/

Yes Matt,

It is a finance thread, but the biggest issue with these grants has been the big four banks reportedly not allowing finance on "head lease" style arrangment properties.

Our are straight freehold title sale properties.

Rgds,

Rob

hi rob

your stuff sounds great

when u say freehold title presume this means purchaser just buys house as per normal?

What security does purchaser get to ensure they get the nras incentive for the next 10 years?

Presume property owner signs document that allows approved property manager to have access 

Hi there,

The purchase of the property is as per usual, the title is in whichever name you choose. The NRAS co-ordinator (Affordable Housing Consulting) will provide you with your formal agreement which covers the 10 year life of the scheme. Basically, if you comply to the scheme, by renting it out at 80% of market price, you will recieve the tax free grant each and every year for 10 years.

There is a panel of 3 proerty managers that you must choose from, whose fees are all pretty similar.

We are pushing to get the website up because demand is hign.

Rgds,

Rob

Who is the Affordable Housing Consulting is this a branch of govt?

who is the investor renting the house to, the tenant or a third party who is then renting it out to the tenant?

Hi,

Affordable Housing was the succesful applicant for allocations in SA. The structure here is straight freehold with no head lease structure.

Rgds,

Rob

what price are they? where do i get details?

Interesting. I just posted a question about this scheme in the help topic. I am not sure how this scheme can be an advantage to small investors looking for just one property. Can you explain how or else let me know if its not worth considering on a small scale.
Thanks
Carolyn

Had a client ring me today who was buying an NRAS approved property.

The marketing agent rang him and said he was sending out the purchase contract out but also was sending a separate "side agreement" that he was not to show his Bank.

He rang me to ask me what i thought and my comments were if they have to prepare 'side agreements' then doesnt it tell you something.

Lenders just love clients who have side contracts or special conditions with "rebates" off the purchase price in them.

I mean if you have to commit fraud to get the deal over the line then probably not worth doing in the first place.

Ask yourself why do some lenders not like NRAS.

Richard Taylor - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Thinking of buying your next investment property using a SMSF. Email me for a copy of my SMSF EBook.

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.

If anyone has any SOLID evidence relating to the Banks attitude/policies towards financing NRAS properties in their current  "straight freehold structure" I would be most appreciative. Are the Banks up to date with these changes? Has anyone just gone through the process recently? Why would a sellers agent be cloaking "side agreements" into contacts if  financing such properties is apparently no longer an issue?