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You’re going to sacrifice $5000 a year in rental income, which is taxable, and in return you’ll receive just over $9500 of tax-free income Russell Dell, Belle Property Buderim

value. In return owners receive government subsidies, which mean they come out on top at tax time. Several Sunshine Coast-based developers and builders have signed on to the scheme, and while you might assume lower rent prices automatically mean a lower return, agent Russell Dell, from Belle Property Buderim, says the equation is simple for would-be investors. “You’re going to sacrifice $5000 a year in rental income, which is taxable, and in return you’ll receive just over $9500 of tax-free income,” Dell says. This $9500 is a combination of State and Federal Government subsidies which are available each year for 10 years. A rent price that is below market value means longer tenancies and very low vacancy rates. Dell says NRAS properties are not governmentfunded housing, but rather are designed to assist those people the government calls communityessential workers – police officers, nurses, teachers, office workers and so on – find affordable places to live. Prospective tenants must go through a thorough approval process and property management is contracted out to licensed, experienced managers. Dell says NRAS properties are perfect for first-time or interstate investors, as they are “basically a hands-off investment”. “This is as good as it gets for first-time investors. To qualify for the scheme the property has to be brand new, so they’re trouble free, and the government has very strict criteria around building materials, sustainability and so on.” For a proposed development to be approved

it must meet a crucial final requirement – evidence of high rental demand in the area. Dell is marketing developments at Beerwah and Nambour – both are railway towns a short commute from Brisbane, and Nambour in particular benefits from nearby hospital infrastructure – and says high demand for rentals generally has an “upward impact” on capital growth in an area.

THINK LONG-TERM Stuart Collins is the Sunshine Coast branch manager of the Housing Industry Association, and says while the region’s new housing activity has been slow of late, there are good opportunities for investors to pick up a bargain in the established housing market. A few weeks ago MPP reported on the trend of renovating to rent – investors tidying up tired rental properties to obtain a better return – and for those investors who prefer to be a little more hands on, the current market presents plenty of opportunities to buy a cheap older home. “New housing has been in decline but the renovation market has held its own and continues to – when people purchase these homes they often need some modernisation, and that’s where our industry has the opportunity to diversify and create jobs,” Collins says. “People will refurbish or add extra bedrooms, and that’s what we’re seeing at the moment.” Regardless of your investment choice – be it a new freestanding home or unit, or an existing house needing the love of a good landlord – Collins and Dwyer both emphasise that potential investors need to think long-term.

“Investing in property on the Sunshine Coast is not a get-rich-quick scheme, it’s a long-term plan for future equity growth,” Dwyer says, adding that investors should be looking at a “five-year minimum and a 10-year optimum” for growth. Collins agrees, saying while prices may have softened over the past few years, a look at the long-term data offers a much brighter outlook. “There’s been a steady increase in property prices [over that time],” he says. “You see prices go down one year, but over a 10-year period prices have actually gone up eight to nine per cent. In relative terms there has been significant appreciation. “If you analyse all the various investment opportunities I would much prefer to invest in property than in the share market,” Collins adds. “You need to be in for the medium to long term, but you generally find property does hold its own. “On the Sunshine Coast we have a substantial undersupply of housing. We’ve also got a population that continues to increase, a great lifestyle, all these infrastructure projects and people pouring in. And those people all need a roof over their heads.”

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4/2/2012 2:48:19 PM

My Property Preview Issue 187 - April 5, 2012  

My Property Preview is the Sunshine Coast’s leading real estate and property magazine and is independently owned by the local real estate in...