Noel Whittaker 's comment re. NRAS

[cu@thetop]

No trailing commissions for your financial advisor if you buy NRAS- of course he hates it.

Noel is all about the managed fund ( spotter's fee for the Adsvisor who moves the client into them) returning 7-8% and when it doesn't you can blame the market.

He always was and shall remain a salesman IMHO.

 

[euro73]

FOFA will quite likely change all that. Planners will cease to be paid trailing comms from July 1,2013. They'll need to increase their fees or find alternative revenue, because within a couple of years of the changes coming through, their incomes will start to fall if they dont.... Now ask yourself how successful an increase in fees will be when most of them just put people into cash or equities that are generally showing less than 6% returns, taxable? I dont believe clients will just decide they're agreeable to paying ever more fees for ever poorer advice and results. Planners will need to look at alternatives. NRAS property is already becoming much more popular with planners. Just wait until FOFA kicks in. They will soon realise that the NRAS "asset" generates double digit tax free returns AND earns them extra revenue from the property and loan referrals.

But nothing will change until the dealer groups who control planners, get their heads around whats coming. They're going to go through exactly what brokers went through 4 years ago when comms got cut and trails got cut...denial, then acceptance, then the stark realisation that diversification/ cross selling is necessary, especially as the banks launch competing wealth businesses...

tick tick tick.... the banks are after everything.

 

[Adrian Jenkins]

So in 10 years time if you want to sell a NRAS home, presumably the property value has also increased, perhaps doubled who knows, I would also assume the rental income would not cover the sale price, so why would an investor buy NRAS home if there were no benefits left unless you can purchase substantially cheaper? Perhaps I am missing something, but this is how I interpret what NW is saying???

I think you may be missing something, certainly I am confused by your comment. You say "I would also assume the rental income would not cover the sale price, so why would an investor buy NRAS home if there were no benefits left unless you can purchase substantially cheaper?"

a) Property values are always compared with other similar area, similar properties - Cheap, Expensive are only verbal measurements against what is VALUE. If all properties have increased in $$ value, then buying exactly the same cheaper, may not be an option. Getting a good deal is always the investors objective. Exchanging $$$ for something that you believe is worth more $$$ than you gave, is 'a good deal'

b) To suggest that investors only buy property where incomes outweigh cost and are profitable is definitely not the current case for most property investments. Otherwise WHY is NRAS so unique delivering profitable investment from year 1?


c)In this scenario you present, in 10 years time whatever the price is, will be comparable to other identical property. In 10 yrs time, people will be speculating just as we are now, what the then future 10 years will hold. And just like our predecessors, and people now some will say "HA! It will never go up like that again...not for me " Others will see that it will. Generationally, the next generation of buyers does not have the memories of the past when a block of dirt was on tuppence hap'eny, but has grown up with and knows only current market, current forces and current value and speculates the future.

 

[KCprop]

... and probably the tenants, have deteriorated and there are no more tax benefits to offer the unsuspecting buyer....

MTR

Are the tenants of properties under this scheme an issue?

 

[Ausprop]

Are the tenants of properties under this scheme an issue?

tenants are always an issue, particularly in resi! With NRAS you find that the tenants are so grateful to get one that the prospect of losing it keeps them well and truly in line