Ethical investment: Brokers urged to brush up on NRAS

by AB06 Jul 2012

Property investors have just two years to take advantage of the National Rental Affordability Scheme and brokers are being urged to make the most of it. We speak to BARRIE GAUBERT of Iden Group and KIRAN SALDANHA of The Finance Professionals for their thoughts on NRAS investments.

Video transcript below:

Donna Sawyer, Australian Broker TV
Donna Sawyer:
 Property investors have just two years to take advantage of the National Rental Affordability Scheme and brokers are being urged to make the most of the opportunity.  Barrie Gaubert of Mortgage Manager Iden Group says NRAS offers good returns for certain investors.

Barrie Gaubert, Iden Group
Barrie Gaubert:  They should really get on board with this a 100% really really quickly because I think the investors are interested in this, because it’s a very good incentive for them and I think the scheme from government’s point of view is actually very good because it’s actually attracting the right sort of quality tenants that new investors do want.  Plus in between you’ve got brand new property being constructed which is the other thing it does, lots of good for the Australian economy with the new construction happening.
Kiran Saldanha, The Finance Professionals
Kiran Saldanha:  Where NRAS really fits into this strategy where my clients are concerned is it brings to the fore a negative gearing possibility with refundable tax offsets that actually let a person look at a positively geared property from the cash flow perspective.
Donna Sawyer:  Kiran Saldanha of Finance Professionals says one of the biggest challenges with willing clients is actually identifying suitable NRAS properties.  
Kiran Saldanha:  From a broker perspective I am struggling at this point of time to find stock, to find good stock for my clients to invest in.  We have got 2 years before this scheme runs out for people jump into it.  And I would think most risk profiles out there from a client perspective would actually allow them to hold an NRAS property.  Also from the perspective of now being able to hold property under self managed super funds, with the benefits that NRAS brings to the table and the positive gearing on one side with the negative tax benefits because it’s a new property, it’s really an ideal opportunity.
Donna Sawyer:  So what do brokers need to know before offering advice on NRAS investments? Barrie Gaubert of Iden Group says both brokers and investors should do their homework first.
Barrie Gaubert:  Look a generalised broker can get into it, but yes it would make sense to have some training associated with what NRAS rules and regulations and requirements are and that would apply also to the investor.  I mean investors should get their own financial advice before they do go down this path.  Because if they don’t have a 10 year view on property investing, it’s the wrong sort of investment for them.  But it’s appropriate for brokers, because brokers are looking to diversify and they are assisting their clients and if their clients don’t get helped by the brokers themselves, they will look for brokers that can help them.
Donna Sawyer:  This is Donna Sawyer reporting for Australian Broker TV.