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Dual Key Double NRAS

Discussion in 'General Property Chat' started by smallbuyer, 16th May, 2016.

  1. smallbuyer

    smallbuyer Well-Known Member

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    Hello,

    Does anyone know about or have any experience with Dual Key NRAS? The ones with 2 NRAS allocations? Any dealings, insights or info would be appreciated :)

    thanks
     
  2. Cactus

    Cactus Well-Known Member

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    @euro73 would be able to help. If the price stacks up I imagine the yield would be insane.
     
    legallyblonde likes this.
  3. euro73

    euro73 Well-Known Member Business Member

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    Typically I'd expect the yield to approach 19-21K CF+ tax free , depending on the price point....
    but with the low rates on offer today, it could be even stronger. A great way to pay down debt and boost borrowing capacity. But even a single NRAS dwelling, where 8-10K CF+ is the norm, is very effective for debt reduction.
     
  4. smallbuyer

    smallbuyer Well-Known Member

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    thanks for the reply. you haven't heard any issues around getting paid the double entitlement? The government is fine with this arrangement.
     
  5. Redom

    Redom Mortgage Broker Business Member

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    From my understanding the government (state and federal sign off) is involved in the allocation of the NRAS entitlements. So they shouldn't only be fine with it, they've been actively involved in the allocation of it. :)
     
    el caballo likes this.
  6. euro73

    euro73 Well-Known Member Business Member

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    The incentives are paid on a "per dwelling" basis... and two detached dwellings on 1 title are still 2 dwellings and can therefore be suitable for 2 incentives ( subject to you being able find dual NRAS at this late late stage)
    I know of investors who have secured NRAS incentives on triplexes and quadplexes, so they are receiving 3 or 4 NRAS incentives on those.
     
    chindonly likes this.
  7. Danmicb

    Danmicb Active Member

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    they are still out there:

    Dunsborough Golf Estate : NRAS Investment Property

    but not sure about purchasing 2hrs away from Perth at this time. Cash-flow wise great but long term CG questionable? Risky. You may be ok. Also prob paying a premium there. Whats you're opinion on this one @euro73
     
  8. euro73

    euro73 Well-Known Member Business Member

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    Not sure there are any doubles still available at Dunsborough... I sold several of these last year , but call Ron at NRAS Residential and ask...

    Numbers wise, @ 495K P/Price and using 90% LVR lending, your contribution would 12% ($59,400) + stamp duty on 184K land ( $5644) . That's @ 65K of equity being invested into an asset that even with zero growth would provide you with @ 20-25K tax free per annum, or @250K or more of tax free surpluses over the next decade, which if redirected towards debt reduction would represent well over 400K in real value... which would in turn improve your equity and borrowing capacity substantially, allowing you into several additional INV properties...


    65K equity in, for 20-25K tax free out? 38% tax free return on 65K... I guess you have to ask yourself whether you can deal with a location that might produce limited CG if you are going to see those sorts of benefits from the purchase either way...

    or looked at another way, if you could put 65K of equity- which you borrowed at 4%, into an high interest online saver and get returns of 38% tax free, would you? Remember- no capital growth for bank accounts.

    Or looked at another way , even if you sold it for zero growth and just got your money back in 11 years ( post NRAS) but had extracted 250K + of tax free money , and paid off a lot of debt with it, would your equity position and borrowing capacity position be dramatically improved?
     
    Last edited: 14th Aug, 2016
    albanga likes this.
  9. Danmicb

    Danmicb Active Member

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    Definitely improved. Seems a no brainer on paper. Have your clients had any trouble with vacancies there? I'm actually gutted I didn't look into this strategy sooner, now with it being wound up and all.
     
  10. euro73

    euro73 Well-Known Member Business Member

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    It's not wound up... there are still some opportunities around. Not doubles though