NRAS – you've got to be kidding me: Todd Hunter

GUEST OBSERVATION

My most read and commented on blog was my thoughts on the NRAS “scheme”.

Well, I can say I was right and the story of this “scheme” only gets worse I’m afraid.

Earlier this year I had a client call me and let me know her NRAS property in Sydney that she purchased through another property company had been trashed. She only found this out after not receiving rent for two months. This sparked her to inspect the house to find they had fled the house and left it damaged along with rubbish everywhere.

When she investigated it further, she found that four bedroom house had eight people living in the house. The lease agreement was only approved as having four people living there. The consortium managing the property had not done any of the required property inspections, like they had said they would do.

And funny enough, they now don’t return her phone calls.

So after spending several thousands of dollars in repairing and cleaning the house, they thought they may want to sell it. The bad experience had put a foul taste in their mouth. I offered to refer her to a friend who is an agent, who works in the area and they have done an inspection. Now the fun begins…

The agent gave them what they believed to be fair market value price in a strong Sydney market and this dollar figure was still $80,000 less than what they paid for the house.

So, now they have a house that has been trashed, now vacant and worth far less than what they paid for it.

Could it get any worse?

Yes it can.

Now I don’t know the reasons why, but it would appear that the government department responsible for NRAS has amalgamated with another government department and as a consequence many (and quite probably all) of the tax refunds for NRAS were not paid for the last financial year, due to a software glitch that they couldn’t repair.

These payments amount to close to $10,000 per annum that the investor is supposed to receive back in compensation for letting out their property 20% below market value.

To make it even better, they have no ETA on when the problem will be fixed, if at all.

This was money these investors could have really done with to help pay for the trashed and damaged property they have been left with.

So I am sorry, but have I missed the positives of NRAS?

TODD HUNTER is a buyer’s agent, director and location researcher for Sydney-based wHeregroup.

He reached a personal investment portfolio of 50 properties in 2006 and has also started building an SMSF portfolio.

This article was originally posted on Todd's blog.