If you like Negative Gearing ….you will love Positive Cashflow

When it comes to investing there have always been a number of questions to ask:

Property or Shares? New Property or Used/Secondhand/Established Property?

But now there is only one – When can I get myself an NRAS property?

Given the rollercoaser ride most have experienced in one way or another with the Share Market in recent years we can rule out shares for now.

While negative gearing makes property investing attractive, there are some doubts about the future of negative gearing in relation to old property (established).  The scheme was developed originally to stimulate building new homes and help to meet needs for affordable rental accomodation but has been hijacked over the years by real estate agents and now less than 40% of negatively geared properties are new homes.

A recent article in Fast Company magazine covered the Negative Gearing Blues including the opinions of many leading economists. By way of example “the  ANZ Bank’s Phil Chronican took aim at negative gearing, claiming the tax break was leading to an unhealthy focus on housing as a means to get rich, while pushing property prices to unaffordable levels”.

Inevitably in their efforts to balance budgets Governments will look again at the impact of negative gearing. A recent article from the Sydney Morning Herald highlighted the potentila for this in reporting that:

“The Australian Taxation Office (ATO) has released its Taxation Statistics for the 2009-10 financial year, which once again revealed that Australia is a nation of loss-making landlords. According to the ATO, there were 1,751,679 property investors declared to the ATO in 2009-10 – representing one in seven taxpayers – an increase of 59,235 from the 2008-09 financial year.”

The NRAS program has been developed by the Federal Government to address the issues that the current approach to negative gearing (incidentally Australia is the only country in the world with such a scheme) has failed to address…making sure there is an ongoing supply of affordable rental accommodation.

In addressing the issue the Federal and State Govts have made investing even more attractive. The same tax concessions apply and help you to minimise your Income Tax and have now been supplemented by an annual tax free grant of $9,981 (CPI adjusted annually).

While under the terms of NRAS properties must be rented toat 20% less than market rate the grants more than offsets this.

As a result it is likely that at the end of the year as an investor in NRAS after all costs are paid you will end up with more money in your pocket ….now thats Positive Cashflow.

But stock is very limited …so no matter what you feel about the economy the time is right to act now and Phone us or email us to an In-home Presentation.

So you can own an investment property for very little if any outlay and also help address the shortage of property available at an affordable rate for people who need it such as emergency services workers and the like.

It about Affordable Housing not a Public Housing (eg Housing Trust) scheme for unemployed etc.

So great quality tenants are virtually guaranteed for 10 years.

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