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Disclaimer
NRAS SchemeHelping you build a better future
• There is no relationship implied or real between Federal or Sate Governments and Investors.
• This information as provided is not endorsed by the Australian and/or Queensland State Governments
• This information reflects the NRAS Schemes understanding of NRAS requirements.
• This summary has been provided based on the information available at the time of preparation.
• The details should be confirmed by buyers prior to entering into unconditional contracts where the returns anticipated are subject to the relevant properties receiving NRAS incentives.
Who are we?
NRAS SchemeHelping you build a better future
*15 Years in the property industry*Boutique Company*Special personal service to clients
Strategy
*We will look at your personal circumstance
NRAS SchemeHelping you build a better future
Planning
NRAS SchemeHelping you build a better future
If you Fail to Plan you are planning to FAIL
We have 20-30 years of holiday after retirement
Now is the time
NRAS SchemeHelping you build a better future
We should be working on creating Wealth for our Retirement
The Realization
NRAS SchemeHelping you build a better future
Bureau Statistics tells us:There are approx 2 Million Pensionersin Australia and 75% live on less than:
$380 per week
Pensioners Struggle
NRAS SchemeHelping you build a better future
Do you think they planned for this?
Imagine monitoring the heating, lights, Air-conditioning and on top of that
paying your rates?
Baby Boomers 1946-1955
NRAS SchemeHelping you build a better future
Government provide pension.
Population Explosion
Australia is the Single Largest Demographic
NRAS SchemeHelping you build a better future
* Living Choices* Spend Pattern* Work Habits
Determines our:
Australia’s Population is living Longerthan ever before
NRAS SchemeHelping you build a better future
Men living till 80-82 Years OldFemale living till 86-87 Years Old
Australia is rated 4th Life expectancy
NRAS SchemeHelping you build a better future
In association with Feren-Stockdale & Leggo
1946 - 19 Working to support 1 Retiree
2020 - 3 Working to support 1 Retiree
2050 - 2 Working to support 1 Retiree
Who is going to fund your Pension?
Government knows mums and dadsare to struggle in retirement
NRAS SchemeHelping you build a better future
How will they live, save or survive with all the overheads come with living?
The Government is helping us by giving incentives grants, tax advantages, etc.
NRAS SchemeHelping you build a better future
This is why we are here tonight to show you how you can take advantage of these
for yourself.
Global Financial Crises What can you do?
NRAS SchemeHelping you build a better future
Explore your options for Wealth creation and take advantages of this situation.
How fine is Australia really going?
NRAS SchemeHelping you build a better future
We have Farming, Minerals, Education, Infrastructure, Medicals
Did you know?Australia the one of the Highest Desirable
Destinations in the World?
NRAS SchemeHelping you build a better future
Opportunity
NRAS SchemeHelping you build a better future
O.P.MOther Peoples Money
Right Structure Right Strategy
Right Leverage Low Interest Rates
Now is the Right time to Invest
NRAS SchemeHelping you build a better future
It gives you everything you need to make it happen.
Maximum Tax AdvantagesGovt Grant $9,524 1st Year alone
Abundance of TenantsLeverage Your
Money
What is the Purpose of NRAS?
NRAS SchemeHelping you build a better future
Started for Essential Services People
Police, Army, Medical
Is it Public Housing?
NRAS SchemeHelping you build a better future
No, Why not?
There are criterias to meet like:
Is it Public Housing?
NRAS SchemeHelping you build a better future
No, Why not?
There are criterias to meet like:
Who needs to qualify
NRAS SchemeHelping you build a better future
Developers Builders
Managers Tenants
Qualification for NRAS Tenants
NRAS SchemeHelping you build a better future
Earning criterias for a tenant
Tenants need to register on a waiting list.
Single Tenant needs to earn $815+ weekly2 Adults and 1 Child - $1,397+ weekly
NRAS SchemeHelping you build a better future
The NRAS Scheme:
NRAS SchemeHelping you build a better future
• It is a Federal and State Government backed incentive scheme designed to encourage Investors to develop additional houses for the rental market.
• It has the effect of providing an affordable rent program for low/medium wage earners.
• It is designed to stimulate institutional and to a lesser extent individuals to invest in rental property.
• It is NOT a social welfare program – It targets Middle Australian Families.
• It will provide government “Tax Free Incentives” of $623 million for 50,000 new affordable rental dwellings to be occupied between January 2009 and June 2012.
• The PM has announced that the further 50,000 incentives will be offered post 2012 if ‘demand remains strong’.
Policy Goals of GovernmentThe Incentive has two primary policy goals.• The first is to increase the supply of new rental housing directly into the housing market.
• The second goal is to improve affordability for the eligible target groups.
• NRAS will provide an investment platform to facilitate the construction of 50,000 houses nationally.
NRAS SchemeHelping you build a better future
NRAS provides
• A tax free incentive of $9,140 (June 2010) per dwelling/year for 10 years. Escalated annually at rental component of CPI.• The incentive is paid to eligible owners at the end of each tax year in two parts:
A Commonwealth Government Incentive currently of $6 855 per dwelling per year as a refundable tax offset or payment; and
A State or Territory Government Incentive currently of $2 285 per dwelling per year in direct or in kind financial support.
New houses or units are rented at a discount of 20-25% to eligible households.
NRAS SchemeHelping you build a better future
NRAS in summary:
• Properties that apply for and receive the NRAS incentive must remain in the scheme for a minimum of 10 years.
• There is a provision for:
1. On selling the properties provided they remain in the scheme or
2. For replacing them with the similar properties in the same area or
3. Opting out of the scheme before your 10 years is up by giving QAHC 6 months notice.
NRAS SchemeHelping you build a better future
Market Rent is assessed as the Market Value of Rents charged by similar accommodation in the Local Real Estate Rental Market and needs to be justified.
• Long term Tenancy Agreements provide tenant security
• There is No Discrimination through discernible quality of housing
• NRAS housing is distributed randomly through estates generally at a maximum take-up of 30%
• But entire In-Fill sites may be offered through NRAS (Say 8-50 units).
NRAS SchemeHelping you build a better future
• Rents and the NRAS Incentive are indexed annually to the rental component of CPI. Current rental indexation for target markets is running at between 6 and 12%.
• Market Values (Rents) are subject to independent assessment in years 1,4 and 7.
• Suitable stock can range from studio apartments at < $200pw to family housing > $400 pw.
• Eligible households have Income thresholds that are indexed:
NRAS SchemeHelping you build a better future
The Current Thresholds as at June 09 are:
NRAS SchemeHelping you build a better future
Household type Initial income limit $ Upper income limit $
One adult 42,386 52,983
2 adults 58,596 73,246
3 adults 74,808 93,510
4 adults 91,048 113,773
Sole parent with 1 child 58,638 73,298
Sole parent with 2 children 72,695 90,869
Sole parent with 3 children 86,752 108,440
Couple with 1 child 72,653 90,817
Couple with 2 children 86,710 108,388
Couple with 3 children 100,768 125,960Household income limits are indexed annually on 1 May in accordance with the NRAS tenant income index.
• Providing the incomes reach the upper limit for one year and still remain within NRAS tenancy eligibility criteria provide the income then reduces. Those that exceed this limit are provided a 12 month notice to leave period.
• Normal tenancy pre-checks are required and income levels do not guarantee eligibility
• Groups particularly targeted are the community “essential” persons such as policeman, fireman, teachers and nurses.
NRAS SchemeHelping you build a better future
Who is the Queensland Affordability Housing Consortium (QAHC)
• QAHC is a Charitable Company specifically established to maximize the provision of NRAS funded properties.
• The Consortium aims to provide at least 5,000 new dwellings in Queensland and around 5,000 through inter-state partnerships in NSW and Victoria.
• QAHC charges an indexed Consortium fee of $12 per dwelling per week.
• As a Charitable Company QAHC must discount rents 20-25%
NRAS SchemeHelping you build a better future
QAHC Provides:
NRAS SchemeHelping you build a better future
• A 10 year Head-Lease to investor owners of properties. The head-lease gives control to QAHC and security for both the investor and manager.
• A Secure Income stream via a mixture of Insurance policies, Self Insurance by QAHC and Management Policies that cover;
1- Building replacement and owners contents.2- Public liability.3- Repairs for tenant damage.4- Tenant Arrears & Tenant Abandonment &5- Vacancies via Immediate Access to extensive potential tenant Data Bases.
• Whilst not a guaranteed rent, the ‘Secured Income Stream’ provides a high degree of income-certainty for investors.
• An Accredited Housing Manager for the NRAS funded properties.
• Housing Managers receive a tenancy management fee of 10% of the market rent ( Indexed & excluding the NRAS incentive).
Typical Property Management Structure
NRAS SchemeHelping you build a better future
PropertyOwner
HeadLease
QAHC PropertyManager
Property Tenant
Management
Agreement
Manage Property
Tenancy Agreement
This structure is designed to give maximum protection to the Owner and increase the level of
responsibility carried by the Property Manager by way of the
Management Agreement
NRAS is it worth it…. and what’s in it for YOU?
• The NRAS Incentives are worth $9,140 per year (CPI ADJUSTED) paid regardless of the level of rent you receive. Guarantee for 10 Years.
• If your annual income is $15,600 and the tenant pays 25% below market value, then you give away $4,420 to the tenant, to receive $9,140 from the Government.
• That’s right! You give the tenant a small discount and the government gives you a big incentive.
• In this example you are $4,328 per year better off.
The annual incentive of $9,140 is TAX FREE and not assessable for income taxAlso the $4,420 your giving to the tenant can be claimed against your taxable income.
The TAX FREE status of the incentive amplifies you investment returns. As you still receive all of your normal depreciation and investment allowances.
NRAS SchemeHelping you build a better future
NRAS SchemeHelping you build a better future
Section 2
* We are Leveraging our Money
NRAS SchemeHelping you build a better future
Why do people invest in property?
* We can pay off our home quicker
* Create an on-going income for the rest of our lives
If there was a way for you to either create an ongoing income for the rest of your life
or pay off your home in 10 years.
How much on a weekly basis will you be willing to put aside to make this happen?
NRAS SchemeHelping you build a better future
NRAS SchemeHelping you build a better future
Property Investment Price $370,000Stamp Duty 4,725Loan 2,620Solicitor 1,000Total
Interest Rate
Total Yearly Payment Weekly
$378,715
$26,472$509
6.99%
Cash Flow Analysis
NRAS SchemeHelping you build a better future
Yearly Property Outgoings
Rates.Rent Cover Plus.Insurances. $5,000Maintenance.Property Manager.
Yearly $26,472 Weekly $ 509
Cash Flow Analysis
NRAS SchemeHelping you build a better future
Out Goings $ 5,000
Yearly $ 26,472 Weekly $ 509
Total Outgoings $ 31,472 $ 605
Cash Flow Analysis
NRAS SchemeHelping you build a better future
Rental Income
Yearly $ 18,121 Weekly $ 350
Yearly $ 31,472 Weekly $ 605
Cash Flow Analysis
Cash Flow Analysis
NRAS SchemeHelping you build a better future
Deductions
Depreciation Internal Fittings and Fixtures $ 4,657Building Depreciation - 2.5% over 40 years $ 4,750Loan Cost / 5 years ($2,500) $ 500 Total $ 9,907
Rent $ 18,121 $ 350
Shortfall Bal $ 13,351 - $ 255
Yearly $ 31,472 Weekly $ 605
Cash Flow Analysis
NRAS SchemeHelping you build a better future
Tax RefundSalary $80,000 Tax $18,928
Deductions -$ 9,907Total Deduct -$ 23,258
Total Deductions -$23,258
New Taxable Income $56,642 Tax $10.992
Tax Savings of $7,936 $152 week
Rent. $ 18,121 $ 350
Shortfall Bal $ 13,351 - $ 255
Yearly $ 31,472 Weekly $ 605
Cash Flow Analysis
NRAS SchemeHelping you build a better future
Total Out goings $ 605
Rent $ 350
Taxman $ 152
Your contribution $ 103
In Summary
Cash Flow Analysis
NRAS SchemeHelping you build a better future
Total Out goings $ 605 $ 605
Rent $ 350 (– 20%) $ 280
Taxman $ 152 $ 165Your contribution $ 103
NRAS CASHFLOW
Govt Grant (TAX FREE $9,524) $183
NRAS $ 23+
Norm NRAS
Cash Flow Analysis
NRAS SchemeHelping you build a better future
HOME Norm Inv Prop NRAS
$605 p.wk
$103 p.wk
$23 p.wkIn your pocket
Emotional
Calculated
Opportunity
NRAS SchemeHelping you build a better future
How long does Property take to double in value and why do
we need to know?
* We can use it to work out how long it will take to Pay off our home.
* We can also work out how to create an ongoing income for the rest of our lives.
NRAS SchemeHelping you build a better future
On average property has doubled
approx every 10 yearsIn Australia
NRAS SchemeHelping you build a better future
Property Growth History
Image from - http://www.smartcompany.com.au/property/20100921-house-prices-over-the-decades.html
NRAS SchemeHelping you build a better future
How do we use this to pay your home loan off in 10 years with minimal cash
input BY YOU.
NRAS SchemeHelping you build a better future
How to create an ongoing income for the rest of your life using property
NRAS SchemeHelping you build a better future
10 $ 740.000
10 $ 370.000
20 $1.480.000
2
5 $ 555.000
Yrs
(2.5) $462.000
3
(5) $ 555.000
$1.480.000 $1.480.000
Total Assets $ 4.440.000Owe $ 1.387.000Assets $ 3.053.000
4%$122.650
NRAS SchemeHelping you build a better future
10 $ 740.000
10 $ 370.000
20 $1.480.000
2
5 $ 555.000
Yrs
(2.5) $462.000
3
(5) $ 555.000
$1.480.000 $1.480.000
Sell 3rd Investment $ 1.480.000Owe $ 1.387.000
Have 2 properties debt FREE
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