During your investment research, you may have heard about debate 'NRAS' properties and whether or not they make good investments, but many people still don't understand how the scheme works.
Blogger: Darren Standish, Property Prosperity
NRAS is short for the National Rental Affordability Scheme and was legislated by the Government in 2008 and strongly supported by all political parties.
The scheme was implemented to deal with the massive short fall of affordable housing in Australia. The National Housing Supply Council estimates by 2013 there will be a deficit of affordable dwellings of more than 200,000.
The purpose of NRAS is to supply quality rental homes at reduced rents for the large number of Australian families unable to buy their own homes or to afford the full cost of market rents. Affordable housing is aimed at helping semi professionals such as policemen and woman, social care workers and teachers live closer to where they work.
There are three parties involved the Investor, The Consortium and The Tenant
Purchasing an NRAS approved dwelling is exactly the same as buying any other investment property. You own own the property and retain possession of the title and you may choose opt out of the NRAS scheme at anytime.
The benefits to you as an investor you will receive a tax credit each year for 10 years with the minimum tax credit of $9,524.This tax credit increases each year with the rental component of CPI.
A government approved consortium is appointed to manage the tax incentive on your behalf and appoint a tenancy manager to manage your property.
As the investor you have the option of choosing your tenant from a shortlist or you can rely on the agent to handle all of this for you.
Your “eligible” tenant will then pay rent at 20% below market value rent.
About Darren Standish
Darren Standish established Property Prosperity in 2004 initially as a property development company, however after repeated requests for assistance the business evolved into a development consulting business.
Property Prosperity was initially focused on assisting clients with subdivisions and negotiating with councils to ensure that clients maximized their return on investment. Over the years additional services were gradually added to ensure the development process was as seamless as possible for its clients. We expanded into offering individually tailored finance solutions and then added Property Development Analysis, Property Sales and a Builder Broker Services.
Darren is the overachiever of the team and has more qualifications than your average university graduate. As well as completing a Bachelor in Economics, Bachelor in Commerce and post graduate in Accounting he subsequently went on to complete a Diploma in Financial Service, Diploma in Real Estate and Certificate IV in Building. He is a qualified Certified Practicing Accountant (CPA), a licensed Real Estate Agent, licensed Mortgage Broker and holds a Builders License.