NRAS Valuations

I've been having some preliminary discussions with 2 NRAS companies, trying to decide who to go with and establish a long term relationship.

I've seen it discussed in these forums, that you should get up front valuations for "off the plan" NRAS properties to avoid surprises later on.

I mentioned this at a meeting with 1 of the companies and they told me that they have had some valuations come in at 10-15% out but their clients still went ahead with the deal because the rent was still at the original level. This raised some alarm bells. Anyone care to comment or provide some advise please.

I'm keen to get get some NRAS properties, but obviously want to reduce risk.
 
If the valuations don't stack up then don't do it. That shortfall needs to come out of your pocket.

Questus is who I'll be doing my properties through if I receive my allocation in Round 5.
 
I mentioned this at a meeting with 1 of the companies and they told me that they have had some valuations come in at 10-15% out
That means you need 30% deposit to get 80% LVR. Add another 5% costs. You need 35%!!
Some people argue that 'paper costs' + margins by marketing are taken off the price to come up with the valuation.
I gave it a real hard look.. but nothing ever clicked.
Make sure to get the opinion of those companies and their consortiums from Euro. He is the Guru in this area.
 
I've got 2 NRAS properties so far and am in the process of buying a 3rd. I have found the process for valuation for NRAS properties to be no different to valuations for other new stock. There is no use putting in tens of thousands extra just because of the NRAS incentive.

1 of my properties valued on the money. The other valued $9k short on a $531k property. How they decided it wasn't worth the $9k extra I don't know but I felt I could make up that short fall without any problem, especially as it was a dual occupancy NRAS that entitles me to 2 NRAS incentives.

I've let 2 NRAS opportunities go because they valued way short. The numbers just didn't stack up and so it wasn't worth it. Just like any other new stock really.
 
I've let 2 NRAS opportunities go because they valued way short. The numbers just didn't stack up and so it wasn't worth it. Just like any other new stock really.

That's pretty much what it boils down to.

NRAS is an incentive to offer discounted accomidation to low income tentants. It's not an incentive to pay more than what the wider market does.
 
If the valuations don't stack up then don't do it. That shortfall needs to come out of your pocket.
Questus is who I'll be doing my properties through if I receive my allocation in Round 5.

Agree with this...

If the property isn't valued at what you are paying, then I wouldn't be paying.

I find this works with all properties, you take the scheme, grant, guarantee out of the equation is it still a good buy.

If the property wasn't NRAS would you still buy it if the valuation came in short?
 
I would avoid these properties like the plague.

I guess the real question is...what does this say about the company?

thanks
 
I have done half a dozen NRAS deals and only one has come in at valuation. The rest where between 10-25K under. I let my clients know what the valuation was but they decided to proceeded anyway. It has been explained to me that the valuers who under value do so because they assume that a commission has been built into the price as soon as they are aware that it is NRAS. Hard to prove if there is a bias towards NRAS from valuers or that they are actually overpriced. I suspect it could be a combination of both?
 
I have done half a dozen NRAS deals and only one has come in at valuation. The rest where between 10-25K under. I let my clients know what the valuation was but they decided to proceeded anyway. It has been explained to me that the valuers who under value do so because they assume that a commission has been built into the price as soon as they are aware that it is NRAS.

My experience is that the stock is usually "rubbish" and the valuers comps arent far off.

My "best" is 70 k under, and the buyer still bought the thing, against our advice and we walked from the business.

I suppose that assumption of the "built in comm" is not unlike in the old days of 2 tier marketing where if your buyer was from another state, and the stok was new, its was often presumed by valuers that "the wood duck was sold a puppy".

ta
rolf
 
I did an OTP that came in at 405k PP was 430k and got revalued on completion for 425k in West Manly, Brisbane. Not sure if it was due to a rising market or a different valuer, or maybe the same valuer who decided it was worth more once completed?
 
70K under and they still proceeded. Crazy!!!!

Those were my thoughts, but as happens sometimes, the NRAS salesperson had a more convincing argument that 2 valuers were wrong, and Upper Coomera was Upper Boomera.......... that was near 2 years ago.


ta
rolf
 
You've just got to work with people who have established themselves honest reputations, and who do the work upfront to line up prices with valuations that work. If you buy from online companies or anyone else who doesnt get valuations done FIRST, ALWAYS...expect a russian roulette outcome. This is no new phenomenon, and is not the fault of NRAS. This "game" has, and always will be, how new stock - sold by marketers- has been played.

Nothing new here - just get smarter about how you do things. Always, always always get your broker to get a valuation done before anything else, unless the seller has already had mortgage purpose valuations done, and can actually show them to you to give you peace of mind.

But that wont be common- especially buying from marketers- so have your broker organise it. There really are a lot of good NRAS deals that value well.. you just arent likely to find them online.
 
But that wont be common- especially buying from marketers- so have your broker organise it. There really are a lot of good NRAS deals that value well.. you just aren't likely to find them online.
I like the NRAS and agree it is good in principal but hesitant to refer clients for the very reasons outlined above in regards to property marketers. Would be good to get some more info on the reputable operators Euro?
 
Nothing new here - just get smarter about how you do things. Always, always always get your broker to get a valuation done before anything else, unless the seller has already had mortgage purpose valuations done, and can actually show them to you to give you peace of mind.
Many are OTP so the best you can do for your client is order an "as if complete" valuation and cross your fingers (and toes) that it values up once complete?
 
Back
Top