NRAS Cash Flow Comparison for Australian Investor

Turn a negative cash flow property in to a positive cash flow property.

The following sample cash flows are based on a current townhouse project that we have available (9^th May 2012) in Melbourne’s middle ring suburb of Pascoe Vale, due to complete in October 2012 and priced at $495,000.

Both cash flows assume an investor with a current taxable income of $100,000 (and no current tax deductions) who has existing equity in another property which allows them to borrow all required funds to purchase this property and cover all purchase costs etc.  Assuming an interest only loan at 6.5%.

Cash flow one (below) shows the investor purchasing this property as a standard rental property, no NRAS, so normal market rent, usual management fees etc.

 















As you can see, in year one the investor has a net cost (after taking in to account rent in, tax deductions in, property costs and interest out) of $3,720 in year one, or around $72 per week.

Cash flow two (below) shows the investor purchasing the same property, but with the NRAS option, as such rent is reduced by 20%, management fees have increased slightly to take in to account the NRAS management and the NRAS tax free annual amount has been added.

 


As you can see, in year one the investor is now cash flow positive by $1,971, or $38 per week.  Investors do need to wait until the end of the year to receive the NRAS payment, but once received, as you can see, it makes a huge difference to your cash flow.

Just in year one, the investor is better off by $5,691 and the trend increases each year, so

Over the 10 year NRAS period (should the investor choose to stay in the program for the full length of time) they are better off by well over $60,000.

If you would like to receive the full cash flow report for the above scenarios and would like to receive information on our latest NRAS available properties, please email John Faulkner directly: This e-mail address is being protected from spam bots, you need JavaScript enabled to view it