NRAS misconceptions explained: Kim Clarke
A property expert has said that despite NRAS gaining traction in Mackay, many remain confused about what the incentive actually is.
Xcel Properties managing director, and developer of Plantation Palms in Mackay, Kim Clarke said that the National Rental Affordability Scheme is a minimum risk approach that attracts first time investors.
“Affordable rental properties in Mackay have been scarce for the past 10 years, which guarantees demand for these properties,” said Clarke.
“We’ve recently received an influx of potential investors enquiring about further education, especially around topics such as who will be living in their home, and who will be controlling their investment," said Clarke.
"As a major developer of affordable housing in the Northern Beaches area we have a responsibility to provide these potential investors with sound advice that helps support their decision.”
The top five NRAS misconceptions
1. NRAS properties are used for social housing
These affordable rental dwellings are private property and the investor/owner has complete control over who occupies their property. A couple with three children can earn $109,264 pa (rising to $136,580) and still qualify to rent.
2. NRAS investors are large business groups only
Potential participants in NRAS include everyone from ‘mum and dad’ investors, financial institutions, non-profit organisations, private developers, and community housing providers.
3. NRAS property schemes are operated by government
Although the NRAS is an initiative funded by the Australian Government, it is an approved scheme operator that puts the operating agreement in place between them and individual investors. This can vary widely and investors are encouraged to thoroughly review the provisions contained in their agreement and seek help from a professional before finalising an investment.
4. Tenancy conditions change when it comes to NRAS renters
NRAS homes may be funded by the incentive for up to a period of 10 years and tenants are entitled to the same rights given as tenants of relevant residential tenancy law in their respective State or Territory.
5. Grant payments remain unchanged despite increased rental value
The NRAS incentive is paid per dwelling, and is indexed each year (Dec – Dec) in line with movements of the Rents component of the Consumer Price Index. This is calculated using the weighted average rate of the eight capital cities housing component, and is effective from 1 May 2013.
(Source: Xcel Property)