NRAS Investment Property PROFESSIONAL INFORMATION PACK · NRAS National Rental Affordability Scheme INTRODUCTION “Both payments are classified as “Tax Offsets” for the applicable

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NRAS Investment Property

PROFESSIONALINFORMATION PACK

NRAS – National Rental Affordability Scheme

A FEDERAL GOVERNMENT INCENTIVE FOR PROPERTY INVESTORS

UNITS AND TOWNHOUSES

HOUSE AND LAND PACKAGES

© Copyright 2010 Brisbane Property Brokers (Aus) P/L



INTRODUCTION•

$623 MILLION GOVERNMENT INVESTMENT•

$91,000 PLUS TAX OFFSET OVER 10 YEARS•

NET CASHFLOW - WEEKLY•

TENANTS FOUND FOR INVESTORS•

APPROVED PROPERTIES IN HIGH POPULATION AND • GROWTH AREAS

NRAS FINANCING•

QUEENSLAND AFFORDABLE HOUSING CONSORTIUM•

HIGH QUALITY CONSTRUCTION & FINISH•

STANDARD INCLUSIONS HOUSES & LAND•

HOW DOES NRAS WORK FOR THE INVESTOR•

NRAS INVESTMENT PROPERTY COMPARISON CHART•

LETTER FROM AUSTRALIAN TAXATION OFFICE•

BRISBANE PROPERTY BROKERS (AUS)•




NRAS is a Federal and State Government backed incentive scheme launched in 2008 which is designed to:

• encourage investors to develop additional new houses for the rental market.

• provide an affordable rent program for average Australian wage earners as individuals, couples and families. It is not social housing.

• yield higher than usual returns for investors in the residential property market.

• increase the number of rental dwellings built through the stimulation of demand and investment, while supporting the building industry and related jobs and the Australian economy.

$623 MILLION GOVERNMENT INVESTMENT

The NRAS program is providing “tax free incentives” to institutional and private investors for the purchase / construction of 50,000 new rental dwellings between January 2009 and June 2012. A budget of $623 million dollars has been allocated to achieve this objective.

These dwellings, ranging from unit and townhouse developments to house and land packages, have and are being constructed in locations with high population growth with adequate support infrastructure such as schools, hospitals and job growth to ensure long term tenants. The Government has identified 1.5 million households nationally and 200,000 in Queensland in housing stress that are eligible for the NRAS program. The majority of these are “middle Australia” families, some with household incomes in excess of $100,000 per annum. They pay rents calculated at 25% less than the regular market rental. To compensate the investor owners of these properties, an incentive is paid at the end of each tax year in two parts.

1. $6,855 (75%) is paid as a tax credit from the Federal Government in July each year.

2. $2,285 (25%) cash is paid by the State Government in May each year.

TOTAL = $9,140 Tax Incentive!

NRASNational Rental Affordability Scheme

I N T R O D U C T I O N

“Both payments are classified as “Tax Offsets” for the applicable financial

year. A letter from the Australian Taxation Office

stating this is included as an addendum.”



Both payments are indexed to the housing cost component of the CPI and the annual incentive is paid for 10 years while the property is retained within the NRAS program. The housing cost component of CPI rose by 8.1% in 2009 and 5.4% in 2010, both well ahead of the overall CPI figures for the period.

$91,000 PLUS TAX OFFSET OVER 10 YEARS

The Government’s incentive payment amounts to in excess of $91,000 over the ten year period. More than 20% of the purchase price of the NRAS properties available for sale. The Tax Offset applies to owner investors as individuals, corporate tax entities or as superannuation funds.”

NET CASHFLOW - WEEKLY

TENANTS FOUND FOR INVESTORS

NRAS approved properties are “managed” by Government approved management groups who hold the head lease on the properties and who are responsible for the placing of suitably qualified tenants and the management and maintenance of the properties. In the event of a tenant family leaving the property, the manager’s task is to recruit new tenants from the qualified list.

APPROVED PROPERTIES IN HIGH POPULATION AND GROWTH AREAS

NRAS properties are situated in high population and growth areas identified by the Housing Department and the NRAS organisation. This ensures that a high demand for rental opportunities is in place so that NRAS properties will remain fully tenanted. NRAS approved properties for families are all situated in areas where suitable infrastructure such as schools and hospitals are in place or under construction.

Over 10 Years!

Income $300k $350k $380k $400k $420k

$50,000 +$32 +$0 $16 $27 - $44

$60,000 +$58 +$30 +$12 +$2 - $15

$70,000 +$58 +$32 +$20 +$11 - $2

$80,000 +$58 +$32 +$20 +$11 - $2

$90,000 +$77 +$51 +$39 +$31 +$17

$100,000 +$97 +$70 +$59 +$50 +$36

$110,000 +$106 +$84 +$75 +$68 +$55

Assuming;

• $9,140 incentive

• interest rate 6.81%

• 100% borrow

• market rent less 25%

• all expenses, rent, interest and depreciation price included



NRAS FINANCING

Four major Financial Institutions have approved investment finance loans for NRAS properties available through the QAHC. (Queensland Affordable Housing Corporation) following their due diligence process. Details are available from Brisbane Property Brokers (Aus) and strategic partner organisations.

QUEENSLAND AFFORDABLE HOUSING CONSORTIUM

The NRAS program in Queensland is administered and managed by the Queensland Affordable Housing Consortium (QAHC). The QAHC is a not for profit organisation formed for that purpose.

The QAHC hold the head lease on NRAS properties and are responsible for tenanting the properties, collecting and disbursing the rent and for facilitating the payment of the Tax credit and cash rebates to NRAS property owners.

NRAS approvals for over 2,400 dwellings in Queensland have already been received and applications have been lodged for a further 3,000 dwellings in NRAS Round 3 & 4.

HIGH QUALITY CONSTRUCTION & FINISH

In order to qualify for the scheme NRAS approved properties have to meet or exceed strict construction and finish standard Government guidelines. When construction is complete all properties are subject to inspection and only signed off when they have met all requirements. Investors can therefore be confident that the NRAS property they buy is good value and will stand the test of time.



S T A N D A R D I N C L U S I O N S Houses & Land

Carpet / Blinds• Carpet: Medium duty as per plan.

(Colour as per colour selection.)

• Blinds: Vertical blinds to all windows and sliding doors.

(Colour as per colour selection.)

Ceramic Tiles• Range as per colour selection.

• Kitchen splash back: 60mm high.

• Bathrooms: Floor shower to 1900mm high, 600mm over

bath and one row of skirting tile.

• W.C: Floor and one row of skirting tile.

• Laundry: 400mm splashback, floor and one row of skirting

tile. (not included I garage laundry.)

• Main Floor: colour and description as per colour selection.

Fittings• Kitchen sink: stainless steel 1 2\3 bowl.

• Laundry tub: 45ltr/white.

• WC. suite: dual flush/white.

• Vanity Basins: ceramic white.

• Bath Tub: 1700mm white.

• Taps: all taps flick mixer.

• Shower rail/hand held.

• Mirrors: 900mm high full length of vanities.

• Shower screens: clean laminate with pivot door as shown

on plan.

• Robe Doors: Vinyl sliding doors with powder coated

aluminium frames as per colour selection.

• Towel Rails: Metal double.

• Toilet Roll Holders: Metal.

Garage Doors• Sectional Overhead Garage door (as per plan) colour

bond finish. Remote control unit, including two handsets.

Painting {DULUX}• Internal: walls Actylic hard wearing.

(light base 3 coat systems.)

• Ceilings: Acrylic flat. (Light base.)

• Doors, Skirting and architraves Gloss Enamel.

(light base.)

Electrical• Circuit breakers and earth leakage devices in meter box.

• Light Points and Power Points: ref to electrical plan.

• T.V. points: 2 of with 6lm co-axial cable in ceiling.

(as per plan.)

• Oven: under bench stainless steel Italian appliances.

• Hotplates: stainless steel Italian appliances.

• Range hood: retractable stainless steel.

• Dishwasher: stainless steel Italian appliances.

• Smoke detectors: hard wired with battery backup.

(as per plan.)

• Telephone: one point prewired to the kitchen wall.

(as per plan.)

• Ceiling Fans: 3 blade white, to bedrooms 2,3, and 4.

(as per plan.)

• Light fittings: 240v down light fittings, and 1200mm single

fluorescent light to garage. (as per plan.)

• External lights under eaves: 240v down light fittings.

• Antenna: UHFTV> antenna including booster.

• Air Conditioning: 2.5hp reverse cycle system to living area.

(as per plan.) And 1hp reverse cycle system to bed 1

(as per plan.)

Internal Timber Work• Doors: front door range of solid doors. (paint grade.)

• Internal doors. (paint grade.)

• Skirting: 68mm splayed. (paint grade.)

• Architrave: 42mm splayed. (paint grade.)

Door Furniture• External: Lever entrance set including double dead lock.

• Internal: Lever door handles.

• Privacy lock to bathroom, w.c. and ensuite.



*This is copyright inclusion list of Oracle Buildcorp Pty Ltd only and may not necessarily be standard with other builders.

A detailed inclusion list will be provided at the time of clients purchase.

Pre Constructions• Standard Building Application.

• Insurance Q leave and B.S.A.

• Engineer’s soil report and slab design.

Site Works Foundations and Connections• Fixed Price: site works.

• All site works and connections worked on a 600 square

mtr block of land.

• Water connection to council mains.

Allowance of 10 lmts.

• Power to nearest mains connection point.

Allowance of 10 lmts.

• House construction to N2 wind rating.

• No allowance is made for retaining walls.

Unless allowed in tender.

• Engineers designed slab and footings with control joints

where applicable.

Tender Protection• Penetrations and control joints protected by physical

barriers.

• Perimeter of house is protected by visual inspection,

exposed edge slab.

Energy Efficiency• Sarking to all external walls.

• Sarking to entire roof area.

• R 2.5 batts to ceiling area (except garage and external roof

areas.)

• Gas H.W.S. RINNAI.

• 5000 ltr water tank.

Timber Framing• Ext. wall framing engineered at 450mm centres.

• Int. wall framing engineered at 600mm centres.

• Trusses. engineered at 600mm centres.

• T2 treated framing.

Windows• Aluminium windows with paint grade reveals.

• Keylocks to all windows and sliding doors.

• Flyscreens to all windows and barrier screens to all hinged

and sliding doors.

Fascia / Gutter• Fascia: colorbond finish.

• Gutter: colorbond finish (quad profile.)

Roof• Monler concrete roof tiles (refer colour selection.)

Bricks• Joints: Raked and Natural

• Bricks: P.G.H. (ref colour selection.)

Plumbing and Drainage• Taps: 2 x external hose cocks.

• Down Pipes: Painted PVC. (ref colour selection.)

LandscapingTo Standard 600 Square Mtr Block

• 70 lmts 1800 high timber fencing allowed.

• 1x900mm wide steel framed gate.

• 75 square mtrs exposes aggregate concrete allowed for,

driveway, pathway porch and patio. (Not sealed.)

• Brick Letter Box, with metal insert.

• Provide turf to remainder of block.

• Provide a fold down powder coated wall mounted

clothesline (as per plan.)

Warranty• 6 months maintenance warranty.

• Structural warranty as per Building Industry Standard.



(FaHCSIA) assesses properties for NRASendorsement. When endorsed the result is an

annual tax free rental subsidy paid to theproperty owner as tax certificates (effectively

tax free income) at the end of each year.

Queensland Affordable HousingConsortium

A Registered Charity – has made applications on behalf of Property Owners & Developers to the Department ofFamilies Housing Community Services & Indigenous Affairs (FaHCSIA) for National Rent Affordability Scheme (NRAS) endorsement for various properties.

Federal requirements relating to volume and operational factors make QAHC an ideal applicant to the Federal Government.QAHC has already had properties NRAS endorsed in Queensland.

$9,140

$6,855 from theFederal

Government

$2,285 from theState

Government

As the Approved Applicant, QAHC acts as administrator and puts in place management

systems to collect and disperse the subsidy and manage the Property for the Investor.

BPBA

Brisbane Property Brokers (Aus) (BPBA) identified several Developers who were well placed to provide suitable stock to QAHC to use to apply for the NRAS endorsement.

BPBA is now offering that stock toInvestors for purchase subject to theNRAS.

THE INVESTOR

1. The Investor Buys the NRAS endorsedproperty.

2. The Investor enters into a 10 yr head lease with QAHC who then appoints the property’s manager.

3. QAHC has established a Very Low Risk, Secure Income Stream for owners via insurances and management systems.

4. QAHC arranges the tax certificates from the Federal and State Governments to be issued to the investor annually.

NOTE: Further and more detailed explanations can be found at: www.qahc.asn.auwww.brisproperty.com.au

HOW DOES NRAS WORK FOR THE INVESTOR

The roles of Brisbane Property Brokers (Aus) andThe Queensland Affordable Housing Consortium



INVESTOR BENEFIT

NRAS INVESTMENT PROPERTY THROUGH QAHC

NEW INVESTMENT PROPERTY

ESTABLISHED INVESTMENT PROPERTY

CONSTRUCTION QUALITY

HIGH QUALITY SUBJECT TO FINAL GOVERNMENT REQUIREMENTS

SUBJECT TO LOCAL AUTHORITY REGULATIONS

SUBJECT ONLY TO VALUER / PEST INSPECTIONS

COMPETITIVE RENTAL RATE

VERY COMPETITIVE (25% BELOW MARKET RATE)

MARKET RENT MAY GAIN A PREMIUM AS NEW PROPERTY FIRST

MARKET RENT OR LESS DEPENDING ON CONDITION

TAX CREDIT AND CASH NRAS REBATE

$9,140 pa MINIMUM ADDITIONAL INCOME ($175 per wk)

NO NRAS REBATES NO NRAS REBATES

DEPRECIATION ALLOWED AS TAX DEDUCTION

YES – HIGH FOR NEW PROPERTY

YES – HIGH FOR NEW PROPERTY

YES – BUT LOW OR MINIMAL FOR OLDER PROPERTIES

TENANTS FOUND YES NO NO

PROPERTY MANAGEMENT

YES – VIA QAHC & MONITORED TO HIGH STANDARDS

NO – UNLESS ARRANGEMENT MADE BY OWNER

NO – UNLESS ARRANGEMENT MADE BY OWNER

LEASE ARRANGEMENTS

HEAD LEASE HELD BY QAHC FOR 10 YEARS

DIRECT RENTAL AGREEMENT WITH TENANT

DIRECT RENTAL AGREEMENT WITH TENANT

LONG RENT AGREEMENTS

YES – MINIMUM ONE YEAR UP TO FIVE

SUBJECT TO NEGOTIATION

SUBJECT TO NEGOTIATION

CAPITAL GROWTH POTENTIAL

YES YES YES

SELL PROPERTY AT ANY TIME

YES YES YES

NRAS INVESTMENT PROPERTY COMPARISON CHART

Comparing government supported NRAS property with a conventional investment property purchase

Over 10 Years!





BRISBANE PROPERTY BROKERS (AUS)

Brisbane Property Brokers (Aus) are “Strategic Partners” of the QAHC and have the biggest and most diverse range of NRAS developments in Queensland and Australia.

Brisbane Property Brokers (Aus) has been in existence for over ten years and specialise in the sales and management of investment properties. They have been involved with the NRAS program since inception and undertake a coordinating role between property developers, the QAHC, Financial Planners, Mortgage Brokers and specialist real estate agencies nationally.

ASSET WISE FINANCIAL SOLUTIONSAsset Wise Financial Solutions Pty Ltd specializes in obtaining investment finance and investment loans in the fastest and most convenient way possible. We are passionate about helping our clients enter the investment property market. Asset Wise can provide you with the tools to create and build wealth through property investing and take advantage of the associated tax benefits. We will also show you how to reduce your mortgage term by as much as half and show you how to save thousands of dollars in interest. Throughout our years in business we have enabled many of our property investors to enjoy a passive income throughout their debt-free retirement. At Asset Wise we recognise that suitable investment finance is different for everybody. Our professionals will use their vast experience to find you the perfect lending option to suit all of your investing and home loan needs. Get started now. Utilise the many years of our financial experts’ experience to find you the best deal for your investment loan.

The information herein has been provided by third parties and while care has been taken no warranty is given in respect to accuracy. The material is a summary only and is not intended to be nor should it be relied upon as a substitute for obtaining professional advice. Changes may be made periodically to the material and in addition the information could include technical inaccuracies or typographical errors. Brisbane Property Brokers (Aus) Pty Ltd makes no warranties or representations regarding the quality, accuracy, merchantability or fitness for the purpose of any material herein. To the extent information is downloaded, no warranty is given or representation made that the material will not cause damage or is free from any computer virus or other defects or errors.

Under no circumstances will Brisbane Property Brokers (Aus) Pty Ltd be liable for any incidental, special or consequential damages including damages for loss of profits arising in relation to the use or viewing of the material provided. Brisbane Property Brokers (Aus) Pty Ltd stresses that all parties using the material should seek independent advice.

We do not offer specific investment advice and only refer clients to licensed practitioners. Independent advice should be sought.

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NRAS Investment Property


NRAS – National Rental Affordability Scheme

A FEDERAL GOVERNMENT INCENTIVE FOR PROPERTY INVESTORS

Documents

NRAS Investment Property PROFESSIONAL INFORMATION PACK · NRAS National Rental Affordability Scheme INTRODUCTION “Both payments are classified as “Tax Offsets” for the applicable