Hi,
I have searched for pricing info about NRAS properties and found that NRAS remains a niche market (50 000 properties over 5 years) that can attract premium pricing. Hence caution is necessary in picking the right property. There is a risk that you run into challenges with the bank. At least one bank does not even lend to you You may only get a 70 % LVR instead of the usual 80 %
Click here to view an interesting discussion link.

The "first home owners scheme" has been dubbed "the first home vendors scheme". Nevertheless if you did not have the deposit and have entered the game early enough and secured your first home owners grant you will still be happy about your capital gains.

How does NRAS shape up ? Is this another government scheme that benefits the landlord  investor more than the tenant ?  Let's have a look.

• House price $360k
• Rent 5% $18kpa
• NRAS savings for tenant $3.6kpa
• NRAS benefits for landlord $9.1 kpa - $3.6kpa - $0.5kpa = $5kpa

Who is the biggest winner ?
You guessed right, its once again the property owner.

There are however some downsides for the investor. Government schemes always add complexity to a project and they curtail the freedom of ownership to a degree. This results in some restrictions due to compliance requirements and consequently attracts additional costs for the builder and the buyer. Plus I have a suspicion that the builder and marketing agent may also dip in a little and hike the price. Add higher fees for rental managers , auditors and tax accountants to the cost of ownership and the picture should be complete . Overall NRAS properties in most instances appear to be a good proposition. But you should always do your owns sums and then run them by your financial adviser. Don't rely on advertized figures alone, they are groomed to maximize sales.

Another alternative is the defense ministry housing scheme. I believe NRAS pays better and is saver. What if the armed forces close a base. I would not want to run such a risk.

So, how much does an NRAS property return ? Have a look at the attached email and then do your own homework. Check out what none NRAS properties sell for in your target market and make sure you understand all purchasing and holding costs.
The table below was emailed to me by Graham Shiels in February 2011. Here are his details:


Graeme Shiels

Managing Director
Property Queensland Pty Ltd &
NRAS Queensland Pty Ltd
68 Carlock Promenade
Karalee QLD 4306
Phone: 0417 725 168
Fax:     07 3294 8636
Email:  shiels@bigpond.net.au
www.propertyqueensland.net
www.NRASqueensland.net