rom what I understand, Ironfish is not a consortium. They are a property group who accesses stock through a consortium. But I may be wrong on that. You can find most answers here... http://fahcsia.gov.au/sa/housing/progserv/affordability/nras/Pages/default.aspx#nras_13
Nras
- Thread starter Aaron Sice
- Start date
Nope, thats not the group. I dont wish to name groups- not fair. Like Ive said - try a consortium in WA for properties being sold under a Managed Investment Scheme rather than a head lease agreement. Takes alot of the finance problems out of the equation.
MIS stil have issues because the lenders are still, well.....lenders.
MAY POSSIBLY MAYBE that with the MIS you can't forfeit your NRAS (being a managed scheme), HLA you can definitely if you so choose to.
if it's not in the PDS then you need to ask about it.
MAY POSSIBLY MAYBE that with the MIS you can't forfeit your NRAS (being a managed scheme), HLA you can definitely if you so choose to.
if it's not in the PDS then you need to ask about it.
Incorrect. Most the consortiums allow you to take an NRAS property out of the NRAS scheme and rent it just like a normal property if you wish... but you lose the NRAS tax incentives if you do so.
The reason you would buy NRAS instead of non NRAS is simple... sacrifice 20% of the rental in return for $9140 tax free. If it would normally rent for $400 per week you are giving up $80 per week ($4160 annually), to get $9140 back.
So some may charge 10% of the $8000 every year?
Is there a simple web site that has the pros and cons or at least the differences of each states NRAS? The Ironfish group were not even sure if it's tax free or not?? Waiting on a phone call.
Even a website that has all the NRAS properties (or companies that sell them) in each state would be good. Save me going Google crazy
I would snap this one up if it wasn't for the extra fees (especially the $2000 to join and $2000 to leave)
Thanks.
No... theres no one site that lists all the properties. You need to go to the FAHCSIA govt website and look at each of the NRAS "approved participants".
The approved participants are the agents for NRAS, effectively...
Developers wishing to get their properties NRAS approved do so by approaching the approved particpants, who tender to FAHCSIA for NRAS approvals on the developers behalf. Once NRAS approval is secured ( there are tenders being done in rounds. ie round 1, 2, 3, 4 etc) the developers/approved particpants each use a different model to market and sell the properties... thats why you are seeing apples v oranges from state to state...
No. Devine area builders/developers...not a consortium/approved participant. Im talking about one of the consortiums who obtain the NRAS allocations for developers.
1. developer decides to build houses, or units.
2. developer approaches an Approved Participant to assist in placing a submission/tender to FAHCSIA to have some of their developments allocated an NRAS approval. ( developers cant approach or apply for NRAS allocations themselves- all submissions must be done by an approved participant. You'll understand why when you read points 5 and 6) The approved participant charges the developer a fee for this service.
3. Approved participant tenders for X amount of NRAS allocations in one of the tender rounds.( ie round 1, 2, 3 , 4 etc... ) on behalf of the developers who have approached them and paid them to do so.
4. FAHCSIA allocates X amount of NRAS allocations to whichever development projects is determines to be suitable for the scheme. This is an ongoing process as each round of the tender process takes months to run its course and for the Govt to announce which developments it will allocate NRAS to. This is why you keep seeing new NRAS properties appear, and its why there is no single website where all NRAS stock can be viewed.
5. This is where it gets confusing so read this bit twice..
Once the NRAS allocations are awarded by FAHCSIA, there is no prescribed model for how they must be sold to investors. So, some developers retain the services of the approved participant to market and sell their NRAS stock for them. Some developers do not. Instead, they retain real estate agents or property marketing firms or do direct sales themselves. This is why you are seeing a wide variety of companies popping up on google searches, selling NRAS property. BUT remember, just because they are selling NRAS property does not mean they are an approved participant.
6. Meanwhile, whether you buy the property through an agent, a marketing firm, from the developer directly, or from an approved participant...someone must make sure the scheme is administered and someone must make sure the NRAS property remains legally compliant so that the investor can collect their NRAS tax incentive at the end of the financial year. Once again, this is the role of the approved participant. Not the developer, not the selling agent. Only an approved participant is authorised to administer the scheme and advice the Govt which properties have been compliant. ( ie- rented at 20% below market value, and tenanted by people who are within the prescribed income thresholds to qualify for discounted NRAS accomodation)
Obviously, this is why the approved participants need additional documentation signed by the borrower/investor, when purchasing the property... as they are effectively partners in the transaction. This led to different models evolving- ie head lease agreements, managed investment schemes and non entity joint ventures... and this in turn led to confusion amongst lenders, as there are just so many different models amongst the approved participants, and its why you have seen banks not want to get involved in NRAS lending.
However, the good news is that most the approved participants have figured out that a Head Lease is basically useless, and they need to go with a NEJV. banks are starting to look at NRAS again as a result, and just last week ST G announced they will take NRAS deals to 70% LVR without LMI, and 85% with LMI for one consortium/approved participant based in Qld. Again, I wont name names, but if you google Queensland NRAS there arent many results to choose from, so it wont take you long to figure it out.
Hope this clarifies most or all of your questions...
2. developer approaches an Approved Participant to assist in placing a submission/tender to FAHCSIA to have some of their developments allocated an NRAS approval. ( developers cant approach or apply for NRAS allocations themselves- all submissions must be done by an approved participant. You'll understand why when you read points 5 and 6) The approved participant charges the developer a fee for this service.
3. Approved participant tenders for X amount of NRAS allocations in one of the tender rounds.( ie round 1, 2, 3 , 4 etc... ) on behalf of the developers who have approached them and paid them to do so.
4. FAHCSIA allocates X amount of NRAS allocations to whichever development projects is determines to be suitable for the scheme. This is an ongoing process as each round of the tender process takes months to run its course and for the Govt to announce which developments it will allocate NRAS to. This is why you keep seeing new NRAS properties appear, and its why there is no single website where all NRAS stock can be viewed.
5. This is where it gets confusing so read this bit twice..
Once the NRAS allocations are awarded by FAHCSIA, there is no prescribed model for how they must be sold to investors. So, some developers retain the services of the approved participant to market and sell their NRAS stock for them. Some developers do not. Instead, they retain real estate agents or property marketing firms or do direct sales themselves. This is why you are seeing a wide variety of companies popping up on google searches, selling NRAS property. BUT remember, just because they are selling NRAS property does not mean they are an approved participant.
6. Meanwhile, whether you buy the property through an agent, a marketing firm, from the developer directly, or from an approved participant...someone must make sure the scheme is administered and someone must make sure the NRAS property remains legally compliant so that the investor can collect their NRAS tax incentive at the end of the financial year. Once again, this is the role of the approved participant. Not the developer, not the selling agent. Only an approved participant is authorised to administer the scheme and advice the Govt which properties have been compliant. ( ie- rented at 20% below market value, and tenanted by people who are within the prescribed income thresholds to qualify for discounted NRAS accomodation)
Obviously, this is why the approved participants need additional documentation signed by the borrower/investor, when purchasing the property... as they are effectively partners in the transaction. This led to different models evolving- ie head lease agreements, managed investment schemes and non entity joint ventures... and this in turn led to confusion amongst lenders, as there are just so many different models amongst the approved participants, and its why you have seen banks not want to get involved in NRAS lending.
However, the good news is that most the approved participants have figured out that a Head Lease is basically useless, and they need to go with a NEJV. banks are starting to look at NRAS again as a result, and just last week ST G announced they will take NRAS deals to 70% LVR without LMI, and 85% with LMI for one consortium/approved participant based in Qld. Again, I wont name names, but if you google Queensland NRAS there arent many results to choose from, so it wont take you long to figure it out.
Hope this clarifies most or all of your questions...
NRAS was brought in by a very smart woman by the name of Tanya Plibersek - a woman I would vote for as PM tomorrow.
NRAS now has followers, so i doubt it can be canned as such, at the least all existing investors would be honoured and no more new applications will be allowed.
NRAS now has followers, so i doubt it can be canned as such, at the least all existing investors would be honoured and no more new applications will be allowed.
eh?
maybe some people are doing that, but not all.
an NRAS allocation COSTS about $20k for the developer - of course they'll pass that on.
maybe some people are doing that, but not all.
an NRAS allocation COSTS about $20k for the developer - of course they'll pass that on.
I spoke with an NRAS approved applicant here in Queensland and the upfront costs were less than $6k and around $4k when you get up to 10 dwellings. The ongoing costs were about $500 per year. I calculated a conservative estimate of the net present value of the NRAS allocation after costs and forgone rent at around $30k for the site I was looking into. I lost the spreadsheet I made up for it when my hard drive died
Of course, the NPV will depend on the market rental value—the higher the rent, the lower the value of the NRAS because the 20% rent forgone equates to more. I figured that you could sell them for $10-15k above market value of a non-NRAS property and split the difference between the buyer and developer, or just hold the completed dwellings and let the cash roll in.Unfortunately, the land sold before I could make enquiries of the agent
Hi Mike.
They also sent out a follow up to that email, saying that they will be announcing an NRAS policy shortly. I suspect the initial "no NRAS" message was just designed to give them time to get something ready...
Banks will have valuations done Felixter, so if there are any overpriced deals they wont get far with the lender side of things ( when lenders start doing NRAS of course)...
Hi Euro
Your right...must have missed that one. The quick Westpac retraction/stay tuned message was most probably as a result of someone whithin their Credit Policy Dept realising that St George had also recently articulated that certain NRAS properties under certain conditions where OK..... remember Westpac owns St George.
Don't get me wrong, the St George announcement was nothing to get excited about however its a start that someone is looking to perhaps support the scheme.
I know that people within the NRAS scheme are frustrated for the lack of take up generally however I believe that the banks are presently a large part of the problem.
The Westpac sudden change of thought is a bit like their SMSF credit policy which started out at a max. 70% LVR for residential properties (rates and charges you don't want to know about) however in recent times Westpac has increased its max LVR to 80%. I'm guessing that this was done once they realised that they were being out done by...you guessed it, St George who have done 72% LVr and no personal guarantees from day one.
