Would you rather stick a “Fork in the Eye” than buy NRAS Property? We don’t think so.

We have helped hundreds of people get a great start in Property Investing by leveraging the Federal and State Governments’ National Rental Affordability Scheme (NRAS). With special added incentives ($8,500 tax free) to stimulate the building industry ending on December 31st and available stock becoming scarce we thought we should deal with some negative publicity that surfaces from time to time.

Even if you are not in the market for an NRAS Property we would like you to be well informed in case friends, family and colleagues may be interested.

We recently came across a very biased and scathing blog from Todd Hunter, a buyer agent, about NRAS where the author said he would rather stick a fork in his eye than buy an NRAS investment property. The blog has even been featured on the Property Observer website. Whilst everyone is entitled to their opinion clearly Todd’s research was very limited…here are the facts:

Fork in the Eye says: “You have possibly just been ripped off on price by your ‘adviser’ as the developer often pays kickbacks”
We say: WRONG. In our experience in South Australia and certainly within our business this certainly has never and will never happen.

Yes the property investment consultant such as NRAS 4 SA | Property Asset Planning receive a commission for each property we sell from the builder – that’s how we get paid. This payment covers the work we do as the go between between the builder, the property manager, the tenant and the investor to ensure that the investor gets exactly the right investment solution for their specific needs.

We handle everything; every process; every problem. However in no way does this affect the price of the property.

Fork in Eye says: “The property is let out to people who cannot afford market rent…”
We say: WRONG. The property is rented at 20% below the market rate to help the Government overcome the shortage in affordable rental accommodation in this country.

This is not a public housing program; it is a tax incentive to encourage more private investment in the mid to  lower price range of the residential market. With an NRAS property the prospective tenant has to go through a very strict  qualification process and are required to meet the NRAS Income Eligibility Limits. For example a couple with two children must earn at least $94,021 and no more than $117,525. The aim is to make sure that key and essential service workers such as police officers, ambulance officers, nurses etc and their families have access to good quality affordable rental accommodation in good areas at rates they can afford.

Fork in the Eye says: “What happens if they don’t pay the rent?”
We say: Like most investment properties, NRAS properties are managed by a qualified and experienced Property Manager in essentially the same way as a normal rental property. All property managers who are managing NRAS properties have been approved and certified by relevant authorities. However given there is high demand, a long waiting list and a very strict tenant qualification process it is very rare for any tenants to default on NRAS rent.

As an example of the demand for affordable, quality rental accommodation, in Murray Bridge in South Australia, 18 of 22 properties in a new sub division were NRAS properties and all tenanted within 7 days.

Fork in the Eye says: “What are the capital gains prospects of an area drowned in NRAS properties?”
We say: Capital gain in areas where NRAS properties have been build is in line with local averages and in many cases well above. This has to do with NRAS being built in high growth residential areas to meet market demands.

In our experience the norm is there will be no more than 1 or so NRAS properties in each 5 – 10 properties in the area. However in limited cases (in the early days of NRAS) there has been a high density of NRAS properties in an area. For example in  Munno Para West in South Australia, there has been no negative impact on property values in the area. In fact quite the opposite as growth in the value of property in Munno Para West has been consistently at the top end of the market in South Australia.

Fork in the Eye says: “Of all the NRAS advisers I have spoken to, the majority of them own one NRAS property”
We say: Our MD owns multiple NRAS properties but clearly it is more important to judge success of NRAS on the experience of the buyers not the seller.

In fact 30% of all of our NRAS sales come from happy customers referring friends, family and colleagues to us.  It is silly to base judgement of NRAS on what the advisers do as it is not unusual for business owners to invest in the growth of their business and not in buying properties.

With limited stock and high demand many suppliers also want to keep properties available for their customers rather than take them all for themselves.

Fork in the Eye says: “What police officer would want to live in these neighbourhoods?”
We say: Given this is an affordable housing scheme aimed at providing rental accommodation to people who meet strict criteria there is no reason a police officer would not live in the area and in fact many do and many rent an NRAS property. They are among those the National Rental Affordability Scheme aims to support.  So without doubt this is the silliest claim made by Todd Hunter.

NRAS has dramatically increased the number of affordable rental properties across Australia available to those with moderate income households such as teachers, nurses and police. The neighbourhoods in South Australia have included Mawson Lakes, Campbelltown, Lights View and Mount Barker…all near parks, schools, transports etc. The Federal and State Governments select the area where the NRAS properties will be build.

In closing no higher endorsement can come for the quality and integrity of NRAS than the calibre of customers who have purchased recently and those who have been repeat purchasers over the past 3 years or so.

Among our NRAS customers are a Brigadier in the Australian Defence Force and a senior serving officer in the South Australian Police Force who have no concerns about the neighbourhoods or the tenants as these properties are all managed by experienced property manager who are approved of by the Government. So they have peace of mind and security plus unprecedented incentives from the Governments which are helping them to reduce taxable income and grow their investment portfolio.

Please feel free to follow us on Facebook and Twitter and encourage your friends, family, colleagues to consider NRAS (by forwarding them this email)  before the special incentives end and the stock becomes even harder to find.

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