Hi Everone,
I am thinking of buying a NRAS property through Motion Property. Anyone here invested in NRAS property?or worked with Motion Property?
Any feedback (positive and negative will be much appreciated!)
Thanks in advanced!!!
Property Newbie
Hi Merahma,
I have no knowledge of Motion Property so I'll confine my comments to NRAS property.
Much of the NRAS property I see seems to be over priced when compared to similar stock in the local area and much of it is sold on the attractiveness of the tax advantages. If you are seriously looking at NRAS property then you will need to make sure you look beyond the marketing spiel to make sure you are, first and foremost, getting a good investment property.
The NRAS fineprint used to indicate that 75% of the financial incentive was coming from Fedeal Government while the other 25% comes from the State Government. Now I don't know if things have changed a bit but try and pin down exactly how the state government incentive is structured, sometimes it is in kind.
It used to be that getting finance for NRAS properties was a little different to the more typical investment property. Check with a broker to see what sort of LVRs you can get on NRAS property. While property is important – getting the right finance is even more important.
Derek is correct that many lenders run a mile when you mention the words NRAS however in saying that there are still lenders who will go to 90% lvr on a standalone basis.
Can't comment about Motion Property but same story get your Broker to order an upfront valuation so you ensure the purchase price and valuation are one in the same.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Thanks Derek and Richard!Much appreciated!!
I am researching as much I can and going to the seminars to get a better idea before making the decision. So far what I have read on NRAS seems to be too positive. But I am interested to know if anyone has anything to say against it. I don't really know anyone who actually invested in NRAS property. Have either of you invested in this scheme or know anyone who did?
Many Thanks,
Merahma
Qlds007 wrote:there are still lenders who will go to 90% lvr on a standalone basis.Hi Richard,
Haven't touched NRAS for a long time – but am curious to know if the 90% is widespread. No need to divulge who.
Hi Merahma,
I am always cautious about property sold with tax incentives as the big carrot. A key question I would ask of myself if I was looking at a NRAS is – would I buy this property without the NRAS incentive?
If the answer that question is 'no' then move on and find something else.
HI have had a couple of experiences with NRAS property. The most recent was when we were approached by a company who had some NRAS stock to sell. They were offering 8% marketing fee. Something is 'not right' when high marketing fees are involved so we ceased conversation.
Agree with Derek don't hold any NRAS stock in my own portfolio but have financed a few dozen for clients.
Not saying they are all bad or overpriced but make sure your Broker orders an upfront valuation and you get a copy of the valuation report before going unconditional.
You have to ask yourself if the marketing agent (as Derek mentioned) is getting upto 8% of the purchase price by way of a commission is the property overpriced ?
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Qlds007 wrote:Agree with Derek don't hold any NRAS stock in my own portfolio but have financed a few dozen for clients.Not saying they are all bad or overpriced but make sure your Broker orders an upfront valuation and you get a copy of the valuation report before going unconditional.
You have to ask yourself if the marketing agent (as Derek mentioned) is getting upto 8% of the purchase price by way of a commission is the property overpriced ?
Cheers
Yours in Finance
Good advice about the valuation, I'm yet to see a NRAS property I would personally invest in but they could well be out there. A 8% commission (or anything approaching that insane figure) is going to make you mighty inclined to focus on the better points primarily of the property you are selling
Hi, I have had clients and relatives purchase NRAS stock and they have been really happy.
I know that when we sell NRAS our commissions at structured the same way as any other property. I love the program, it's a great way to invest.
Sorry BGN quick question.
Can we assume that your organisation holds a Real Estate Agents License in each State that you promote these properties in ? It is just you mention that your commissions on NRAS are structured the same way as your other property.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Qlds007 wrote:Derek, sorry noticed i missed one of your earlier questions.
No 90% is not the norm in fact far from it and only 2 lenders who will go that far.
Happy to PM the lenders to you if you need them.
Hi Richard,
Not necessary – I just like to try and keep a light finger on the general market, including finance developments if possible. For me finance is the most important matter becuase of the different LVRs surrounding different property types and locations, structures and so on.
And while I am not a broker it is important I understand a bit so i can suggest what questions clients need to ask their broker. After all, I am not qualified to give lending advice.
All read and understood Derek.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Westpac, STG, Rams, Members Equity, BOQ, Resimac, Adelaide Bank, Bank SA, Bank of Melbourne, Bendigo Bank, Wide Bay Building Society, Liberty Financial – all got to 90% plus LMI for NRAS
ANZ, NAB, firstmac, the Rock Building Society – all go to 80% for NRAS
Adelaide Bank and Firstmac allow the use of the NRAS tax incentives for servicing- up to 80% LVR only.
Not all the banks have the same consortiums approved though. Westpac, STG, Rams, Bank SA, Bank of Melbourne,Adelaide , Liberty and firstmac have the biggest list of approved consortiums
Genworth LMI has approved 14 NRAS consortiums in total ( most up to 90% plus LMI)
QAHC ( their non head lease model only. Their Head Lease model is constrained to 85% )
Brisbane Housing Company – 85% (its a Head Lease model)
Aspire Housing – 90% Plus LMI ( its a Non Entity Joint Venture)
Questus – 90% Plus LMI ( NEJV via a Managed Investment Scheme)
Affordable Management Corporation – 90% plus LMI NEJV
Urban Affordable Housing Association – 90% Plus LMI NEJV
Crown Property – 90% Plus LMI NEJV
Ethan Affordable Housing – 90% Plus LMI NEJV
Mission Australia – 90% Plus LMI NEJV
Providence Housing – 90% Plus LMI NEJV
Affordable Housing Consulting – 90% plus LMI NEJV
Quantum Housing – 90% Plus LMI NEJV
Community Housing Canberra – 90% Plus LMI NEJV
Yaran Residential Investment – 90% Plus LMI NEJV
Hi Derek,
I totally agree .. After doing 3 weeks of research on NRAS properties in Melbourne, I agree that in Melbourne all NRAS properties are $40,000 to $50,000 more expense then normal property in same location .
Mat
I've got a small NRAS business I set up to help move some properties in Bundaberg. We don't have specific consortium approval with any of the lenders, but most will fund them. The general rule is that you have to be able to get out of the contract within 90 days with a maximum cost of $1,000. Ours have all been valuing up fine as we haven't used marketing companies to move them, the over pricing of many NRAS properties relate specifically to the cost of selling using project marketers.
Questus, who I think are the largest consortium, cap their commissions at a reasonably low level. I would suspect that their stock is less likely to be overpriced than some others.
Dear Merahma,
I am a member of the management team at Motion Property and thought I would write in and share my thoughts with you.
We have sold many NRAS properties, and have been very diligent in ensuring we do our research and only take on properties that genuinely stack up.
I agree with both Derek and other members. The property needs to be a good investment, even without NRAS. All our NRAS properties come with current market valuations (for both the value and rental estimates). Furthermore, make sure you buy a property in a good area with strong capital growth, so that, if down the track, you decide to exit the scheme, you are able to lease/sell the property without any issues. Most our properties are in areas that fit these categories – Sandringham, St Kilda, East Brighton, Preston, Brunswick.
In relation to the cost – we do not increase the cost of NRAS properties compared to their non-NRAS counterparts. We are currently selling projects where we offer both options and there is absolutely no difference in the pricing. Although the developer pays to have the NRAS license attached to the property, we do not allow them to pass on these costs to the purchaser.
In terms of others who have bought through Motion Property, I am able to supply you with a number of satisfied clients who you can speak to direct. (Both NRAS and non – NRAS).
If anyone here has any further queries, I can be reached on 0433 999 357 or at [email protected]
I've been looking at NRAS properties and someone mentioned you could build and then register it for NRAS. I don't know how feasible this is or if it even really possible for a small investor.
For an alternate point of view on the negative for NRAS the following blog (especially the heated comments) is worth a look:
Hi Moloth,
I'm not sure about house and land but one of our purchasers, who bought a standard apartment with no NRAS attached (off the plan) independently went and applied for The NRAS on his apartment an was approved. I think it depends if the area is suitable.
There are time limitations on NRAS licenses, I'm pretty sure the building has to be completed by March of 2014 – or thereabouts.
Also, there ss a fee involved – again, not sure how much.
You are best to check with the department of sustainability
Thanks BGN very valuable 2nd post.
Derek, sorry noticed i missed one of your earlier questions.
No 90% is not the norm in fact far from it and only a handful of lenders who will go that far.
Happy to PM the lenders to you if you need them.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
I would have to agree that there are still some big commission out there being offer in the nras space. Recently the customers who have the most success are those approaching the vendor directly. This is not difficult to do and there are significant discounts to be made. If you are considering building a portfolio that contains more than a few nras properties then the use of the incentive is key. A couple of the lenders going to 90% plus cap lmi financing are now offering 20k credit facility at closing charged at home loan rates. Could only recommend that in a couple of scenarios.
Don Nicolussi | Mortgage Broker - Home Loan Warehouse
http://homeloanwarehouse.com.au
Email Me | Phone Me"I think of finance as a technology, a way of getting things done." Robert Shiller
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