Well I'm looking at my next investment I've been looking at a unit 5 years into a 10 year nras contract do they get extended easy enough? I get a 11k payment in return for offering the unit to select middle income earns at 20% off. In this case 209pw on a 229k unit. Also I tend to have all investment loans interest only with offset paying off my property. Will this still work with with the nras system? Plan b is to buy some nursing home units great return on investment but still not sure. Also its my first units (well I own a set of triplexes but I own all 3) are body corporates a pain in the ass to deal with or similar? Any other tips ect
Is it a unit in a nursing home (little more than a bedsit - <20m²)? Finance will be difficult, management agreement difficult, outgoings ridiculous.
aged care units? would not touch these. Clearly you want cash flow? what about looking at strategies that can add value with reasonable rental yields, perhaps, neutral....in a State where market is rising.?? If you capture the growth you buy a few and I think still around $300K, hold 50%/sell. 50%, this will most probably trump $2000 pa cash flow rent pa. Turn a neutral into a positive cash flow property, with minimal work, other than source finance and ensuring the market is infact rising. Rental yields are possibly highest in Australia and relatively close to CBD.?? I would also start researching volume, stock on the market if you can achieve growth and higher than average yield... bingo. Apparently Tassie/Hobart is the front runner for capital growth at the moment, last I think 16%. Do your own research on this and check out the thread. If it interests you then you need to find out what is happening on the ground and identify what suburbs are actually moving. This requires lots of phone calls to many re agents... multiple offers? who is buying? days on the market? product? MTR
yea looking for something positively geared. Id prefer QLD as its what i know. Wanting to avoid boom/mining towns.
NRAS can be transferred with the property purchase to you but you will only enjoy the remaining term, in this case 5 years. No extensions are offered beyond the initial 10 years or part there of. This can work but in many cases it makes more sense to go P&I due to up to 1%+ difference in interest rates on IP rates, IO v P&I As @MTR stated would be probably best avoided. BC will come down to the individual/s managing it and how professional and pro active they are???
I've never heard of this, how does it work? I'm picturing the nursing home selling you the unit, and then collecting the accommodation bond from the resident ...
Nursing home units (aged care facilities) arent capable of being owned by any one other than a licensed operator. Dept of Human Services would close the doors. Licensed operators have regulated fees etc. To become an aged care operator takes a massive bank balance ($20m ++) and it is a business. These are largely listed companies or churches etc. Regulated rents and bonds etc. Under state law you could also face problems. (ie Over 55s accom that is not aged care is residential and state regulated) Only the owner can be the resident. The operator grants a license to occupy. Many contracts share gains and all sorts of dodgy dealings to encounter. Highly regulated for standards and operating conditions. Then there are boarding houses and hostels....A whole industry and breaches can be problematic (very highly regulated to keep scum landlords out) but you can access land tax exemptions and more. Yields are often low. Finance can get complex as it crosses between resi and commercial. Most of these types of accom are limited to specific areas by council regs. Often very expensive land eg inner city.
Nooooooo... they dont get extended at all. Max participation/eligibility for an NRAS approved dwelling is 10 years, and the max possible expiry date for NRAS participation/eligibility is June 30,2026. As @Colin Rice has explained, the remaining 5 years of eligibility can be tranesferred from current owner to new owner, but you cant get a new 10 year term. Strong numbers . So market rent ( based on rental CPI ) must be @ 261.25 per week? Rough estimate ( without knowing the outgoings for strata, rats etc) is that you'd be looking at 9.5 -11K CF+ NET depending on your marginal tax rate. Based on contribution/seed costs of 20% + stamps + legals ( say 57K) that's a 16.67% - 19.29% tax free return on equity of 60K . It will work extremely well. Its THE ideal way to utilise NRAS cash flows. ie to pay down PPOR debt. An extra 9.5-11K paid paid off debt each yer has strong compiunding benefits. Shame it only has 5 years left... if it had been 7,8,9 years you could have really made some great debt inroads. But still, for such a modest outlay, ROE of @ 17-19% tax free cant be dismissed. if you an get a 90% LVR deal so that you're only contributing 12% + stamps + legals ( say 39K) ROE grows to between 24.35% and 28.2% tax free
This is why I was wondering - and the great return on investment - maybe the OP meant "unit trust" units in a NH operator?
Unless you're paying cash (don't need finance), avoid nursing homes as they're very difficult to get finance for. In fact, just avoid nursing homes. There's better ways to invest.
This is like a bond (sometimes i view nras from this prism too!). It can be a good little play if doing it with cash & the underlying asset holds value.
@Colin Rice someone has to make money out of it! Like serviced apartments, the profit in nursing homes is first made by the developer and management. The investor is way down the list.
