Transcript Slide 1

Disclaimer
• 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.
NRAS Scheme
Helping you build a better future
Who are we?
*15 Years in the property industry
*Boutique Company
*Special personal service to clients
NRAS Scheme
Helping you build a better future
Strategy
*We will look at your personal
circumstance
NRAS Scheme
Helping you build a better future
Planning
If you Fail to Plan you are
planning to FAIL
We have 20-30 years of holiday
after retirement
NRAS Scheme
Helping you build a better future
Now is the time
We should be working on creating
Wealth for our Retirement
NRAS Scheme
Helping you build a better future
The Realization
Bureau Statistics tells us:
There are approx 2 Million Pensioners
in Australia and 75% live on less than:
$380 per week
NRAS Scheme
Helping you build a better future
Pensioners Struggle
Imagine monitoring the heating, lights,
Air-conditioning and on top of that
paying your rates?
Do you think they planned
for this?
NRAS Scheme
Helping you build a better future
Baby Boomers 1946-1955
Population Explosion
Government provide pension.
NRAS Scheme
Helping you build a better future
Australia is the Single Largest
Demographic
Determines our:
* Living Choices
* Spend Pattern
* Work Habits
NRAS Scheme
Helping you build a better future
Australia’s Population is living Longer
than ever before
Australia is rated 4th Life expectancy
Men living till 80-82 Years Old
Female living till 86-87 Years Old
NRAS Scheme
Helping you build a better future
Who is going to fund your Pension?
1946 - 19 Working to
support 1 Retiree
2020 - 3 Working to
support 1 Retiree
2050 - 2 Working to
support 1 Retiree
In association with Feren-Stockdale & Leggo
NRAS Scheme
Helping you build a better future
Government knows mums and dads
are to struggle in retirement
How will they live, save or survive with
all the overheads come with living?
NRAS Scheme
Helping you build a better future
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.
NRAS Scheme
Helping you build a better future
Global Financial Crises
What can you do?
Explore your options for Wealth creation
and take advantages of this situation.
NRAS Scheme
Helping you build a better future
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?
NRAS Scheme
Helping you build a better future
NRAS Scheme
Helping you build a better future
Opportunity
O.P.M
Other Peoples Money
Right Structure
Right Strategy
Right Leverage
Low Interest Rates
NRAS Scheme
Helping you build a better future
Now is the Right time to Invest
It gives you everything you need to
make it happen.
Govt Grant $9,524 1st Year alone
Maximum Tax Advantages
Leverage Your
Money
Abundance of Tenants
NRAS Scheme
Helping you build a better future
What is the Purpose of NRAS?
Started for Essential Services People
Police, Army, Medical
NRAS Scheme
Helping you build a better future
Is it Public Housing?
No, Why not?
There are criterias to meet like:
NRAS Scheme
Helping you build a better future
Is it Public Housing?
No, Why not?
There are criterias to meet like:
NRAS Scheme
Helping you build a better future
Who needs to qualify
Developers
Builders
Managers
Tenants
NRAS Scheme
Helping you build a better future
Qualification for NRAS Tenants
Tenants need to register on a waiting list.
Earning criterias for a tenant
Single Tenant needs to earn $815+ weekly
2 Adults and 1 Child - $1,397+ weekly
NRAS Scheme
Helping you build a better future
NRAS Scheme
Helping you build a better future
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’.
NRAS Scheme
Helping you build a better future
Policy Goals of Government
The 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 Scheme
Helping you build a better future
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 Scheme
Helping you build a better future
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.
NRAS Scheme
Helping you build a better future
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).
NRAS Scheme
Helping you build a better future
•
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:
NRAS Scheme
Helping you build a better future
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
Household income limits are indexed annually on 1 May in accordance with the
NRAS
Coupletenant
with 3 income
childrenindex.
100,768
125,960
NRAS Scheme
Helping you build a better future
•
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.
NRAS Scheme
Helping you build a better future
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%
NRAS Scheme
Helping you build a better future
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).
NRAS Scheme
Helping you build a better future
Typical Property Management Structure
Property
Owner
Head
Lease
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
Property
Manager
QAHC
Management
Agreement
Manage Property
Tenancy Agreement
Property
Tenant
NRAS Scheme
Helping you build a better future
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 tax
Also 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.
NRAS Scheme
Helping you build a better future
Section 2
NRAS Scheme
Helping you build a better future
Why do people invest in
property?
* We are Leveraging our Money
* We can pay off our home quicker
* Create an on-going income for
the rest of our lives
NRAS Scheme
Helping you build a better future
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?
NRAS Scheme
Helping you build a better future
Cash Flow Analysis
Property Investment Price
Stamp Duty
Loan
Solicitor
Total
Interest Rate
Total Yearly Payment
Weekly
$370,000
4,725
2,620
1,000
$378,715
6.99%
$26,472
$509
NRAS Scheme
Helping you build a better future
Cash Flow Analysis
Yearly
$26,472
Weekly $ 509
Yearly Property Outgoings
Rates.
Rent Cover Plus.
Insurances.
Maintenance.
Property Manager.
$5,000
NRAS Scheme
Helping you build a better future
Cash Flow Analysis
Yearly
Out Goings
Total Outgoings
$ 26,472
$
Weekly $ 509
5,000
$ 31,472
$ 605
NRAS Scheme
Helping you build a better future
Cash Flow Analysis
Yearly
$ 31,472
Weekly $ 605
Rental Income
Yearly
$ 18,121
Weekly $ 350
NRAS Scheme
Helping you build a better future
Cash Flow Analysis
Yearly
Rent
$ 31,472
$ 18,121
Weekly $ 605
$ 350
Shortfall Bal
$ 13,351
- $ 255
Deductions
Depreciation
Internal Fittings and Fixtures
Building Depreciation - 2.5% over 40 years
Loan Cost / 5 years ($2,500)
Total
$ 4,657
$ 4,750
$ 500
$ 9,907
NRAS Scheme
Helping you build a better future
Cash Flow Analysis
Yearly
Rent.
$ 31,472
$ 18,121
Weekly $ 605
$ 350
Shortfall Bal $ 13,351
Deductions
-$ 9,907
Total Deduct -$ 23,258
- $ 255
Tax Refund
Salary
$80,000
Total Deductions
-$23,258
New Taxable Income
$56,642
Tax Savings of
Tax
$18,928
Tax
$10.992
$7,936
$152 week
NRAS Scheme
Helping you build a better future
Cash Flow Analysis
In Summary
Total Out goings
Rent
Taxman
$ 605
$ 350
$ 152
Your contribution
$ 103
NRAS Scheme
Helping you build a better future
Cash Flow Analysis
NRAS CASHFLOW
Norm
NRAS
Total Out goings
$ 605
$ 605
Rent
$ 350 (– 20%) $ 280
Taxman
$ 152
Your contribution
$ 103
Govt Grant (TAX FREE $9,524)
$ 165
$183
NRAS $ 23+
NRAS Scheme
Helping you build a better future
Cash Flow Analysis
HOME
Norm Inv Prop
NRAS
$605 p.wk
Emotional
$103 p.wk
Calculated
$23 p.wk
In your pocket
Opportunity
NRAS Scheme
Helping you build a better future
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.
NRAS Scheme
Helping you build a better future
On average property
has doubled
approx every 10 years
In Australia
NRAS Scheme
Helping you build a better future
Property Growth History
Image from - http://www.smartcompany.com.au/property/20100921-house-prices-over-the-decades.html
NRAS Scheme
Helping you build a better future
How do we use this to pay
your home loan off in 10
years with minimal cash
input BY YOU.
NRAS Scheme
Helping you build a better future
How to create an ongoing
income for the rest of
your life using property
NRAS Scheme
Helping you build a better future
Yrs
0
1
2
3
$ 370.000
5
(2.5) $462.000
$ 555.000
(5) $ 555.000
10
$ 740.000
20
$1.480.000
$1.480.000 $1.480.000
Total Assets $ 4.440.000
Owe
$ 1.387.000
Assets
$ 3.053.000
4%
$122.650
NRAS Scheme
Helping you build a better future
Yrs
0
1
2
3
$ 370.000
5
(2.5) $462.000
$ 555.000
(5) $ 555.000
10
$ 740.000
20
$1.480.000 $1.480.000
$1.480.000
Sell 3rd Investment $ 1.480.000
Owe
$ 1.387.000
Have 2 properties debt FREE
NRAS Scheme
Helping you build a better future