Investment Propertys with positive cash flow is it possible ?

[Guest Chelseadownunder]

Hi all,

Have you seen the adds on TV for TIPS and or NRAS as ways of investing into Rental Propertys ?

I have to admit that I am personally looking into it as an option because of the potential to get into the rental market with positive cash flow which will help potentailly help me clear my residential debt quicker. (Swap bad debt with good debt)

 

Here is some info on the scheme,

Its their blurb not mine so please dont take this as my words or advice. This is a comment from me as a member of the site and I would not avocate some of the hyping up that seems to be present in Australia around rental property. This is just one avenue I think is worth getting more info on to get a more rounded idea of what is possible.

New Exclusive programme to TIPS Rent365 is as follows

1. You must purchase a new house and land package or a home completed that hasn’t been lived in

2. Affordable Housing Management (AHM) will sign a head lease agreement with you to take over control of the rental of your home. They will pay you rent from day 1 and up to 10 years depending on the property whether the home is rented out or not

3. You will receive 100% of the market rent; have no fees to renew your lease each year, no marketing fees, no inspection fees, no review fees and no vacancy. All this will save you thousands. They will also take out landlord insurance to cover any possible damage caused by the tenant.

4. If you choose to sell the property within the 10 years there is a set exit fee of 5 weeks rent in the first year and this is reduced each year by 1. So after year 5 the exit fee is $0

5. You will be buying a property with rent paid to you every day 365 days a year for up to 10 years. The only restriction your property has is that the normal retail rent can’t be greater than $400 per week 　

to start off with. This is because they are trying to help with the lack of properties available for affordable housing that many people are struggling to find.

 

 

Another scheme is

 

NRAS - National Rental Affordability Scheme

This is very tax effective, potentially generating a positive cash flow

 

 

 

Steve

 

All info current at date of posting.

 

Edited June 18, 2013 by Chelseadownunder

[Guest Chelseadownunder]

More Info on NRAS Investment Property Adelaide - This is meant as information for POMS members and not advice as it may not be suitable for everyone.

Cheers Steve

 

There is a new initiative introduced by the Australian Government.

They've introduced a national rental affordability scheme specifically designed to help middle income earners obtain more affordable rental-housing. This is done by offering tax-free incentives to property investors.

The government has committed $1 Billion to build 50,000 houses Australia wide which will help this group of income earners with affordable housing.

The programme has been named the National Rental Affordability Scheme or abbreviated as NRAS.

How it works

Firstly the homes must be built by a recognised builder who has been approved by the NRAS scheme.

As part of the contract to build, you are also required to enter into an agreement with the government for 10 years.

As part of the scheme you will be required to discount your rent by 20% of the market value for that property. For example if the property you purchase has a market value of $300 per week you will have to reduce the rent by $60 a week ($3120 per year) and charge the tenant $240 per week.

In turn, the government has agreed to pay you, the investor $9,981 per year, which will be increased each year in line with CPI.

Now the big plus here is that the $9,981 per year is TAX-FREE as part of you helping out with supplying a property for affordable accommodation.

That equates to around $120,000 tax free over the next 10 years

.This information comes with disclaimers

I thought some POMS members would value this information as I did when I found out about it.

Edited June 19, 2013 by Chelseadownunder