NRAS

Great result. Things can work for anyone, just a matter of applying them correctly.

 

Dont forget the neg gearing - this figure is closer to $2240 after it is applied

makes the softener closer to 9K

 

I think you have acknowledged though there was a lot of snake oil out there being dressed up by NRAS.

If your not overpaying then it's a great product. I hope it will either be reintroduced or something similar in its place.

 

Negative gearing does make it more attractive, that is correct. I didn't want to bring that into it to confuse the merit of the simple benefit in this instance.

 

I sure have. Work very hard to do NRAS right.

 

....and I question why this behavior is even permissible in pchat, especially from an experienced poster? while we enjoy diversity, views and opinion on a subject, if your goal is to deliberate attacking a subject or suburb, you need to provide supported evidence to substantiate your opinion..... If your own broker, property manager, work colleague or friend told you this or that, it can only be supported in isolatio, and should not make bold statements to represent your view...

 

In realty, it summarize in few lines

My Friend:

• Buy anywhere that match suburbs in my portfolio of 30+

Not My Friend: (and I will attack what you wrote)

• NRAS, "Druie", Logan, Sydney, Sydney west, Playford SA, and Logan again

 

The reality is that if you cannot argue the salient points and have to resort to personal attacks, you have lost the argument.

 

My question to @sash would be "If you could build a H&L anywhere and could put NRAS on it, would you do it on your own projects?"
Because that is a possibility
You can control the location, the price and the quality.
The only NRAS I own is on my own projects. It doesn't have to be on some spruiker's wet dream of a project.

 

@euro73 For someone who's actually eligible to live in an NRAS property:

1. What's the lowest price you've recently seen for an NRAS you'd actually consider? No need to give more details if you don't want, I'm just curious what the buy in price could be because our borrowing power isn't high.
2. With no PPOR what would you say is a forward thinking use for the extra cash flow? Offset account, pay down the NRAS IP, deposit for another?

Not asking for specific advice, obviously, just for general thoughts

 

Nice do tell.....what are the numbers....where are you doing this?

I don't the answer to you first question.....but you raise an interesting point....

 

I tried to do this and would happily do it! Oh how much better my CF would be if I could do this. Sadly no nras for pakenham

 

Are you asking me whats available for you to buy, or what my most recent "cheap" NRAS purchase was?

Pay down the least effective debt. Thats ideally non deductible - personal loans, car loans, etc...but if you had a more mature INV property that wasnt generating any deductions of note, why not attack that debt? The other alternative is to salary sacrifice some additional income into Super, and let the NRAS surpluses replace that income. In the end, you will be generating @ 10K extra income per NRAS dwelling - how you choose to redeploy/reinvest that money where you dont have any non deductible debt, is a personal choice.

In my situation - I have no non deductible debt any more so I am doing 2 things;

1. Making extra contributions to Super.
2. Building up buffers in offset accounts against my non NRAS properties. I have actually paid down a couple of non NRAS properties to almost zero balances.

I'm fortunate enough to be in a position to buy another 15 or 20 properties immediately, as I have the income and equity and mortgage knowledge to do so fairly easily... but I have purchased a specific number of properties, that generate the precise amount of deductible losses I want, so that my income is absolutely tax free, and so that the after tax income from salary, neg gearing and NRAS will pay off all my debt , or very close to it, within the next decade. essentially I have used NRAS as a dividend reinvestment to ensure I can retire today...even though I dont intend to retire.

 

More what's available for us but I guess also the other. Although, from your other posts, I take it the currently available properties are few and far between...


EDIT: Thanks for the other comments, too, very enlightening.

 

Numbers? It costs between $1000-1500 per year it has remaining on it for a 'used' allocation. I've talked about it a few times in various posts on NRAS and so has @euro73 . So for example something with 8yrs left would cost around $10-12k to buy. I bought two with 3 years remaining for $2.5k It's a somewhat high buy in but depending on your scenario and project it's worth it. With 8 years of incentives you'll easily pay that back and then use the remainder to reduce debt or increase cash flow or go on a trip to Bali
Basically they are allocations that have previously been on NRAS properties that have been sold and the owner doesn't want to be in NRAS or wants to live in it.
You can only put them on brand new untenanted dwellings and you have to have it approved by the govt bureacracy tangle which can take 10-20 or so weeks. You rent it out at 20% via the consortium in the meantime.
Downsides - paperwork to join, less choice with PMs (in WA it's wrapped up tightly), and higher PM fees.
Upsides - for me outweigh those downsides and it appeals to my OCD control freak nature as I put it on my own product
I have NRAS on my developments in my personal name, SMSF and Trust.

Edit: I forgot to say where. Clarkson, North Perth and Highgate

 

There are a few cheapies that I have available in WA. Im putting one in my SMSF as we speak.

My last cheapie purchase in my personal name was at Port Macquarie . I bought 2 x 260K small 1 bedders approx 50 metres from the hospital and 500 Metres from the new Charles Sturt Uni campus. Already revalued at 320K, 3 months after settlement.

Market rent $280. NRAS rent $224 . At 4% I/O , I'll get @11-12K tax free back from each of them next year. I invested 12% + stamps towards each deal ... so @ 40K. Actually, I got a 5K stamp duty concession from NSW Govt on one of them so it was 35K on 1 deal, and 40K on the other. 11-12K return on 35K is @ 31-32% return. on 40K its @ 27.5% return

Just quietly , if I'd put that 35K into shares or a managed fund or ETF and was getting 31-32% returns tax free, I'd be on the front page of the Fin Review as Morningstar names me global fund manager of the year

But typically I purchase at around 350-400K , meaning @ 65-70K equity is deployed per purchase, for typically a @10K CF+ result. ie 14-15ish % range . Still, not too damn shabby....

 

Interesting....

So how are you funding your living expense and that Porsche Cayenne of yours...development income?

What I don't like NRAS..is that you are depending on income...you are neg geared...essentially the 10k payment pretty much puts you in the positive.

Anycase horses for courses..but I have done the numbers..and it is not for me...

 

I have to say, whether its good luck or good management, I've done NRAS deals in a number of places where the growth has gone crazy as well. Of course, that provides for a nice feel good factor, but none of my clients have ever sold so the equity is all on paper - its the cash flow thats in their pockets. They'd be crazy to sell within the first 10 years, while the properties are spitting out free money .

On the subject of good luck v good management, I see that John McGrath is suggesting Taringa is his choice for the outperformer in Brisbane over the next 3 years or so .... and voila! see my signature at bottom of post

 

Fine if its not for you... but the argument you are using is nonsensical. Your entire investment portfolio is, or has in the past been underpinned by neg gearing. You didnt start with a 20 year old portfolio and mature rental yields.

 

Merhaba ..... yes I know Effendi....

As for Negative Gearing ..not anymore....