Viewing 11 posts - 1 through 11 (of 11 total)
  • Profile photo of CorieCorie
    Participant
    @corie
    Join Date: 2009
    Post Count: 113

    Has anybody looked at the NRAS scheme's and whether they they believe they are a good investment???

    Profile photo of LockymacLockymac
    Member
    @lockymac
    Join Date: 2009
    Post Count: 78

    The idea is sound and the returns are good. It ten years government backed to be positive geared??

    Things that you should remember when buying though
    -Cheap cheap rent. 40% below market rate! In a complex. What kind of tenants will it attract. It could turn into a Getto
    -Resale after ten years might be low.

    But ten years of positive geared property. If you have the right insurance it will be a sound investment

    Let me know your thoughts

    Profile photo of CorieCorie
    Participant
    @corie
    Join Date: 2009
    Post Count: 113

    Thanks Lockymac,

    Since I have posted this comment I have read some other comments on this web site and  spoken to the NRAS hotline. But the most interesting thing that has happened since I posteds this comment is that I went to a Margaret Lomas seminar.  Have you heard of her???
    She has just written an article in "Your Investment Property" magazine about this scheme. She told me last night that she didnt know everything about it, but one thing she did know was that it didnt make sense to her in legal terms. As she saw it the developer was the person  who owned the title not the investor. The investor could never own the title. I must say that I initially thought  this sounds wrong but I must add that she is a very savy property invester and knows her shit!
     
    Even more confused than before!

    Profile photo of LockymacLockymac
    Member
    @lockymac
    Join Date: 2009
    Post Count: 78

    Yeah i Have heard of Margaret through this site. That wasn’t my understanding of the scheme.

    We unsold some properties to clients and the title was transfered, but maybe there are some other ways of doing it. If so why would you cough up 300k and only get rent return. That really doesn’t make sense to me.

    Check out http://www.chfa.com.au/NRAS/

    It should explain it better.

    But if you don’t get a title I would not bother with that NRAS provider just find one who will.

    Profile photo of NRASNRAS
    Member
    @nras
    Join Date: 2009
    Post Count: 4

    ALso another educational web site that is most informative is
    http://www.NRASSchme.com.au
    They also have free weekly webinars that anyone can join. Their guest speakers are experts in their different fields.

    It is worth checking out.

    Profile photo of LockymacLockymac
    Member
    @lockymac
    Join Date: 2009
    Post Count: 78

    Hi Nras

    what is contained in this weekly seminars?

    Profile photo of katchardgutierezkatchardgutierez
    Member
    @katchardgutierez
    Join Date: 2009
    Post Count: 6

    Hello guys, I don't know about that issue but all I know that if it sound too good, maybe it's up to no good.

    Profile photo of LockymacLockymac
    Member
    @lockymac
    Join Date: 2009
    Post Count: 78

    But it is government backed

    Profile photo of CorieCorie
    Participant
    @corie
    Join Date: 2009
    Post Count: 113

    Guys,

    This issue seems to have quite a few grey areas.  I found a NRAS hotline number where you could speak to somebody and ask any questions which you may have. Now one of the Q's I was most keen to ask was the options available if you wanted to sell before the 10 year were up. I was told, and this is from a government representitive,  that they had tried to structure the scheme to allow the most flexability and that if you wanted to sell the property before the 10 year period you could do so to anybody you wished. Not to another investor in the scheme but to anybody you wished and all you would lose is that years tax benifits. This gov representitive also informed me that there are different rules that apply  to the people eligable to rent these properties based on the state the live in.

    Since then I have spoken to a finacial adviser and he has told me that if you wish to sell it must be to a registered investor within the scheme. He could not give me a clear answer on how people qualified to rent these properties.

    The point I am trying to make here is that it is really hard to find two answers to any one question that support each other.
    I think it is very important to make sure that you only apply rules for your state to any situation of any given state.  I have to say the more I look into this investment the more uncertain I become and uncertainty doesnt moke for good investing. I think there are far too many other opportunities out there to bother with these. Having said that I havent totally dismissed them.

    Profile photo of euro73euro73
    Member
    @euro73
    Join Date: 2009
    Post Count: 60

    She is confused, Im afraid.

    When the Commonwealth and State Governments issue  an NRAS approval for a dwelling,  it has an NRAS "entitlement " awarded to it.   The NRAS "entitlement" does not form part of the title, however.  It is simply an eligibility for the property to be entered into the NRAS.

    Now,  here's where people get confused.  if the NRAS "entitlement" is not part of the title, who actually owns it?  The answer is, the "entitlement" is owned by an NRAS Approved Participant , more commonly known as an NRAS Consortium.  The "entitlement" has been approved for the particular dwelling in question, but is owned by the consortium and isnt attached to the property in any physical way or linked to it via the title.  After all, its really just an eligibility for a tax scheme, so there's nowhere to "attach" it to a title.

    There is a very simple reason for this.  The NRAS legislation only allows for institutional investors (also known as approved participants, and more commonly known as consortiums) to participate in the scheme.  So when you buy an NRAS approved dwelling, you cannot enter it directly into the scheme yourself, because you are not an Approved Participant. 

    The consortium that holds the NRAS "entitlement" for the dwelling you are purchasing, is an Approved Participant though, so you have to enter the dwelling into the scheme via their legal vehicle. Depending on which consortium owns the "entitlement" on the property you purchase, this can take the form of either a Head Lease Agreement, Non Entity Joint Venture or Managed Investment Scheme. 

    FYI – No investor "owns" the title on any property until the bank releases it to you. And that only happens when the title becomes unencumbered of a mortgage :)

    Profile photo of DGHayesDGHayes
    Participant
    @dghayes
    Join Date: 2009
    Post Count: 19

    There are few forums on this topic, so I am simply pasting my comment from the other NRAS thread to this one.

    My only comment would be to remember that the NRAS tax offset is a refundable tax offset and therefore you need to have relevant income or a tax liability to offset it against. This type of investment can have its place in your portfolio, however, you simply can't continue to build your portfolio on pure NRAS properties because at some stage you have nothing left to offset the offset against no matter how cash flow positive they are.

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