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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?


*15 Years in the property industry*Boutique Company*Special personal service to clients

Strategy

*We will look at your personal circumstance


Planning


If you Fail to Plan you are planning to FAIL

We have 20-30 years of holiday after retirement

Now is the time


We should be working on creating Wealth for our Retirement

The Realization


Bureau Statistics tells us:There are approx 2 Million Pensionersin Australia and 75% live on less than:

$380 per week

Pensioners Struggle


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


Government provide pension.

Population Explosion

Australia is the Single Largest Demographic


* Living Choices* Spend Pattern* Work Habits

Determines our:

Australia’s Population is living Longerthan ever before


Men living till 80-82 Years OldFemale living till 86-87 Years Old

Australia is rated 4th Life expectancy


In association with Feren-Stockdale & Leggo

1946 - 19 Working to support 1 Retiree



Who is going to fund your Pension?

Government knows mums and dadsare to struggle in retirement


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.


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?


Explore your options for Wealth creation and take advantages of this situation.

How fine is Australia really going?


We have Farming, Minerals, Education, Infrastructure, Medicals

Did you know?Australia the one of the Highest Desirable

Destinations in the World?


Opportunity


O.P.MOther Peoples Money

Right Structure Right Strategy

Right Leverage Low Interest Rates

Now is the Right time to Invest


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?


Started for Essential Services People

Police, Army, Medical

Is it Public Housing?


No, Why not?

There are criterias to meet like:

Is it Public Housing?


No, Why not?

There are criterias to meet like:

Who needs to qualify


Developers Builders

Managers Tenants

Qualification for NRAS Tenants


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


The NRAS Scheme:


• 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 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 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.


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).


• 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:


The Current Thresholds as at June 09 are:


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.


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%


QAHC Provides:


• 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


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.



Section 2

* We are Leveraging our Money


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?



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


Yearly Property Outgoings

Rates.Rent Cover Plus.Insurances. $5,000Maintenance.Property Manager.

Yearly $26,472 Weekly $ 509

Cash Flow Analysis


Out Goings $ 5,000

Yearly $ 26,472 Weekly $ 509

Total Outgoings $ 31,472 $ 605

Cash Flow Analysis


Rental Income



Cash Flow Analysis

Cash Flow Analysis


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


Cash Flow Analysis


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


Cash Flow Analysis


Total Out goings $ 605

Rent $ 350

Taxman $ 152

Your contribution $ 103

In Summary

Cash Flow Analysis


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


HOME Norm Inv Prop NRAS

$605 p.wk

$103 p.wk

$23 p.wkIn your pocket

Emotional

Calculated

Opportunity


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.


On average property has doubled

approx every 10 yearsIn Australia


Property Growth History

Image from - http://www.smartcompany.com.au/property/20100921-house-prices-over-the-decades.html


How do we use this to pay your home loan off in 10 years with minimal cash

input BY YOU.


How to create an ongoing income for the rest of your life using property


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


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