Forum Replies Created
Good Day Moorey,
So you have other properties & accounting for all actual costs?
”
Amendments to the NRAS Regulations to create protections for Investors
The Australian Government has legal arrangements only with approved participants and these legal arrangements do not extend to dealings that approved participants may enter into with third parties, such as individual investors, tenancy managers or business partners. Investors should undertake their own investigations and seek independent financial, legal and taxation advice to ensure that they are satisfied that investing in NRAS is the right investment for their individual circumstances.In 17 November 2017, the Department implemented amendments to the NRAS regulations to increase the protections afforded to investors within the Scheme.
The amendments introduced a power for the Secretary of the Department of Social Services (or her Delegate) to transfer an allocation attached to an approved rental dwelling from one approved participant to another, if certain grounds exist. These grounds include, but are not limited to, instances where approved participants are not passing on the NRAS incentive to the NRAS investor (where there is a contractual arrangement to do so) within a reasonable time of receiving the incentive, or where the actions of an approved participant have contravened a consumer protection law in relation to the NRAS allocation. The transfer can be initiated by the Department or at the request of an investor.
In November 2018 the Regulations were further amended to strengthen investor protections within the Scheme and to improve administrative functions of the Department under the Scheme. For example, the Regulation amendments introduce three new grounds for transferring to a new approved participant and improve the Secretary’s information-gathering powers when conducting transfers.
More information on the NRAS Regulation amendments can be found at the information sheets for investors and approved participants.
Approved Participant and Investor Relationship
Prior to the first round of amendments to the NRAS Regulations introduced in November 2018 the NRAS legislative framework did not recognise issues relating to the commercial relationships between approved participants and NRAS investors.Following the Regulation amendments introduced in January 2018 the Department raised the visibility of NRAS investors within the Scheme.
While the amendments to NRAS Regulations do increase protections for investors within the Scheme the amendments do not extend to interfering in private, contractual arrangements between approved participants and third parties such as investors or property managers.
NRAS Incentive
NRAS homes must be rented to eligible tenants at a rate that is at 80 per cent or less of the market value rent and comply with all conditions of allocation in order to be eligible for the NRAS incentive annually. The NRAS incentive is paid per dwelling, and is indexed each year in line with the Rents component of the Consumer Price Index. The NRAS Incentive is indexed according to movements in the Rents component of the Housing Group Consumer Price Index for the year, December quarter to December quarter as at 1 March, using the weighted average rate of eight capital cities housing component, and is effective from 1 May.The Scheme offers annual incentives for ten years. The two key elements of the incentive are:
an Australian Government incentive per dwelling per year as a tax offset or direct payment
State or Territory governments may offer approved participants a contribution per dwelling per year in direct or in-kind financial support.
Generally, the NRAS incentive is provided to the approved participant in the form of a refundable tax offset (RTO). However, a cash payment can be made if the approved participant receiving the NRAS incentive is an endorsed charitable institution. The current incentive payments are available on the NRAS incentive (indexation) page.NRAS Tenants
NRAS rental homes are available to low and moderate income Australians – people who may find it hard to pay market rental prices. The eligibility of tenants are tested against household income thresholds which differ depending on the household composition.The Department requires all persons who are tenants of an approved rental dwelling to have their income included as a member of the one household, in accordance with the income limits.
New NRAS dwellings entered the Scheme up to 30 June 2016 and will continue to be rented under the scheme for up to 10 years from the date of commencement. As there is considerable demand for these dwellings the Australian Government is unable to guarantee that any tenant will be able to rent a dwelling developed under the Scheme.
The approved participant or their nominated tenancy managers select tenants. Queensland tenants must also register with the Queensland Government’s One Social Housing Register.
It is a condition of the Scheme that all approved participants ensure their dwellings are rented to eligible tenants in order for them to receive an incentive. To find out whether you are eligible to rent an NRAS property, how to apply to rent an NRAS property and your rights as an NRAS tenant, visit NRAS Tenants.
NRAS Conditions of Allocation
The NRAS Regulations sets out the mandatory requirements, called ‘conditions of allocation’, that must be met each year in order for an approved participant to receive the NRAS incentive.The Regulations were made in 2008 and have always required that approved participants in the Scheme only receive an incentive where they meet all conditions of allocation in an NRAS year (defined as a period beginning on 1 May of each year). The Regulations requires all conditions of allocation to be met for an incentive to be received.
The following mandatory conditions must be met in order for an approved participant to receive an incentive in respect of an approved rental dwelling:
the dwelling must not have been lived in as a residence prior to the dwelling entering the Scheme, or the dwelling was unfit for anyone to live in and since the day it was deemed fit for living in, it has not been lived in as a residence between that day and the day the dwelling enters into the Scheme.
The dwelling must be tenanted by a tenant or tenants as prescribed by the Regulations
the rent charged must at all times during the year be at least 20% less than the market value rent for the dwelling;
the dwelling must not be vacant for longer than 26 weeks in an NRAS year or vacant longer than a continuous period of 26 weeks across two NRAS years;
the approved participant must lodge Statements of Compliance for the dwelling with the Department in accordance with Regulations;
each dwelling must comply with the landlord, tenancy, building and health and safety laws of the state or territory and local government area in which the dwelling is located;
the approved participant must comply with all special conditions;
the MRVs must:relate to the market value rent for the dwelling on a date within the permitted valuation period, and
specify the date to which the market value rent relates;
the approved participant must lodge MRVs for the first, fifth and eighth years of the incentive period which will apply as of the first day of the incentive period, and as of the first day of the fifth and eighth years of the incentive period, within the permitted valuation period; and
the permitted valuation period for the MRV begins 13 weeks before and ends 13 weeks after the day when the dwelling is first available for rent, or for the fifth and eighth years of the incentive period, 13 weeks either side of the anniversary of the first available for rent date.”I do breakdowns with clients, you could if this was your only concern just as easily call them.
-
This reply was modified 3 years, 7 months ago by
Jaxon. Reason: misspell
Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
Hey Jimmy,
I live on the gold coast & I would question is this strategy better than just buying a property ready to room let out?
have you done comparisions of cost time etc.
as an example, I have a client who purchased a property in Southport (3b townhouse)
converted garage to ensuited room.
gets $780+ rent as now its a 4b and rents to students/professionals etc
and the purchase was well under 400k
the main reason is I am really unsure if you will actually get approval for the above because what you are talking about is very different from typical approvals.
So usually the town planners work for the council mate, it’s a private certifier who usually puts the apps in for people who do not wish to submit themselves.
This link always to search the properties zoning & read on the limitations & scope of the zoning (great tool)
http://cityplanmaps.goldcoast.qld.gov.au/CityPlan/
I hope this information helps, I have seen similar things done but not what you’re talking about in the way you wish to do it.
Kind regards
Jaxon Avery
Disclaimer: This is general information only & may not be right for your situation or circumstances.
-
This reply was modified 3 years, 8 months ago by Jaxon. Reason: Add disclaimer
Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
Good Day Gallo,
So I have very specific case study breakdown I do for clients with potential investments they may be looking at.
You can always look at SQM or any other data house that does property reports to then use their data input to essentially create your own.
You should be able to cross-reference all current ones & use that data to know what to use to create your own.
Excel is great as a tool to pre populate etc.
Any further questions happy to help!
Kind regards
Jaxon Avery
Disclaimer: This is general information only & may not be right for your situation or circumstances.
-
This reply was modified 3 years, 8 months ago by Jaxon. Reason: Add disclaimer
Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
Good Day Ben,
Agree with Richard in relation to the above answer
although the above is very simple, it alludes to some of the bigger questions surrounding your situation & that there may be multiple things that can be done to enhance & clarify multiple aspects of your situation your purchase etc.
All of this will help you better understand where you are, where you want to go & create a map to get there.
If you go through some of the success stories on here I am sure it will provide massive value!
Wish you all the best!
-
This reply was modified 3 years, 9 months ago by Jaxon. Reason: add more
Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
Good Day Zane,
almost? haha, has she compared options if your not happy with that strategy?
Firstly to confirm your talking about the FHOG? *(First home owners grants & HOMEBUILDER SCHEME
https://www.wa.gov.au/organisation/department-of-finance/fhog
https://treasury.gov.au/coronavirus/homebuilder
So from my understanding previous incentives get paid when the build/purchase goes ahead and you wouldn’t be able to use for another property as they are usually part of the purchase (without refinancing as they usually paid directly to the builder, lender, etc)
but as per the Treasury Fact sheet states
“It is expected that the relevant State or Territory Revenue Office will distribute the $25,000 grant directly to
the applicant.”Have you created criteria for your first investment property? do you understand what yeild/risk of areas etc?
Lots of really in depth valuable content on this site.
Wish you all the best *(all above in general & does not take account of your situation)
-
This reply was modified 3 years, 9 months ago by Jaxon. Reason: UPDATE
Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
Good Day Investwell.
Very interesting, I have been studying & speaking with another property management firm doing 3.9% as well.
They are called Yabonza & do not guarantee rent, I mean bsaed off the numbers I cannot see how “certainty” can make profits if they follow this model.It literally doesn’t make any sense financially (from my very basic first review) unless they plan to massively scale their business & alter it later or something to grow revenue & build trust now or are doing something very different *(unlikely)
I mean it’s possible but unlikely.
Love to hear how you go!
-
This reply was modified 3 years, 9 months ago by Jaxon. Reason: misspell
Jaxon | Jaxon Avery – Financial Adviser
http://www.jpafinancialservices.com.au
Email Me | Phone MeJPA Financial Services Pty Ltd
-
This reply was modified 3 years, 7 months ago by
