How good is NRAS?
August 21, 2012 7:21 PM Subscribe
Do you have any experience of investing in an NRAS (National Rent Assistance Scheme) house in Australia? Or the Australian property market in general?
posted by A Very Muddled Alpaca to work & money (2 answers total) 2 users marked this as a favorite
I'm hoping to invest some money and came across the NRAS system which seems too good to be true. Basically you invest in a house, rent it out at 80% of the market rate, and in echange the goverment gives you ~ $9500 a year. I met with a investment property management company yesterday and it seems you can invest in a house through NRAS and get all the negative gearing benefits of a negative cash flow property as well as getting positive cash flow from the government refund. Basically, paying the interest only on the loan would be covered by the rent and tax savings, and then the goverment money could all be money in the bank (tax free).
I'm new to investment as a whole, and property in particular, so I'm not sure if there's something I should be watching out for. Also, from what I understand the Australian property market is still somewhat overvalued, though I can't seem to find a consensus on what that may or may not mean for the future. I'm in South Australia.
I guess my questions are: have you had any experience with NRAS, good or bad? And would it be unwise to invest in Australian property when the market is a bit of a mystery?