The National Rental Affordability Scheme is
designed to help provide affordable rental housing to specific types of
individuals and, at the same time, improve property investment property in the
country.
This looks like
one of the best ways to keep real estate alive in a situation where most
economies in various parts of the world are anxious about how things are going
to turn out for the housing market.
Since the
housing bubble burst in the United States several years ago, other economies in
different countries have felt the same blow. The effects of this occurrence are
bad for everyone.
People lose
their homes while no one seems to want to invest on real estate out of fear.
This seems to be the perfect scenario for a housing industry that is bound to
fail--horribly.
This is why the NRAS is a great thing. By implementing
this housing scheme, people have better chances in having a roof over their
heads and investors are not left without any returns on their investments.
What is the National Rental Affordability Scheme?
The National Rental Affordability Scheme is
a housing scheme implemented by the government that calls on investors to
invest or purchase dwellings or housing units that they will rent out to
specific types of people at a lower rate. In exchange, investors will receive
tax exemptions and cash incentives for a period of ten years.
This program is
designed to achieve two things: encourage investors to purchase properties,
which is great for the economy, and provide affordable rental housing for
specific tenants.
Rental housing made more affordable
Everyone knows
that renting a house can be very expensive. Add to that the fact that there are
areas where dwellings are leased out on a very high price. For people who still
do not have their own homes, this is a situation that puts them on the losing
side no matter what they do.
They can't not
have any place to stay, especially if they have kids. At the same time, they
would have to work extra hard to keep up with the monthly rent.
NRAS is a
blessing from the heaven because homes that are under this housing scheme are
20% below the normal market rate. This means the homes are cheaper than
ordinary rental housing units.
But this is not
for everyone. Only a select group of people can qualify for affordable rental
housing from the National RentalAffordability Scheme.
The program's
guidelines state that those who are eligible to avail of these benefits are
public workers, families, and those who are more than 55 years old.
These people
also have to apply for tenancy under the program. If these people pass the qualifications,
which are to have a specific income threshold, then they can save a lot of
money from their monthly rent.
What's in it for the investors?
Tenants are not
the only ones who can benefit from NRAS.
Investors will also be able to enjoy certain perks of investing on properties
that they rent out at a lower price.
A property or
dwelling that has been certified by the National
Rental Affordability Scheme will be rented out at 20% below the normal
rates. In exchange of the loss acquired by the investor, he will receive tax
and cash incentives for ten years. He will receive the incentives each year and
when the agreement ends after a decade, that is the time when the rent can be
brought back to the normal rates.
It is estimated
that investors can earn as much as $100,000 after ten years. Owners of the
properties also need not to worry about getting a tenant because there are
thousands of them waiting to have an affordable rental housing.
