Housing affordability is an important issue for many Australians. In response to this national problem, the Australian government worked with state and territory governments in 2008 to implement the National Affordable Rental Program, which aims to address the lack of affordable rents by providing financial incentives. These allow qualified tenants to rent buildings at 80% or less of the market rent, for a period of up to 10 years.
This plan has been beneficial to tenants, but what exactly is it offering to investors?
Buyers can purchase NRAS properties through the intermediary of an approved participant. They then receive an annual subsidy paid by the government through the NRAS participant, if the housing is rented to eligible NRAS tenants.
This subsidy is calculated on the basis of housing group CPI rents, which is the weighted average of the eight capital cities. Investors can also apply a refundable tax deduction on the rent generated by their NRAS properties, which allows them to make significant profits.
The Port Macquarie area is a vacation destination that has attracted visitors and retirees for a long time. With relatively affordable properties, especially compared to Sydney, it has become a great place to establish NRAS development, Poet's Ridge.
"There is a strong demand for affordable housing, especially affordable rents, in the area, and Poet's Ridge is the only NRAS development in the region that rents affordable housing," says Paul Adams of AMG !.
"It offers a range of 2 to 3 bedroom independent homes and duplexes and attracts low-income renters who are eligible for the plan. At the present time, the attraction for tenants lies in the fact that the rent is subsidized and that they pay 80% or less of the market rent. For example, if the market rent for a two-bedroom home is $ 375, it will be $ 300. "
The resort is located in the suburbs of Kendall, approximately 20 minutes from the Port Macquarie CBD. This makes it very convenient for working professionals, which helps boost strong demand. This, combined with high rental yields, puts Poet's Ridge on the target of investors.
"In terms of NRAS returns, Poet's Ridge is really at the top of the table – investors can expect returns to always be high, above 6%," Adams said.
"What makes Poet's Ridge beneficial to the investor is government subsidies, which more than make up for the difference [in rent]. You combine that with the projected growth of capital, and the story is pretty strong! "
Top suburbs:
alexandra hills
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Werribee
,
Goworthville
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Stafford Hts
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Midland
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