Ha... really? Have all my hours of posts on here just gone right over peoples heads?
The concept is extremely simple. CASH FLOW.
Buy an NRAS approved property - rent it out at 20% below normal rent.
This generates greater losses than a normal investment property, because you are receiving less income from an NRAS property.
This in turn generates a superior tax outcome.
But in return for provding rental accomodation at a 20% discount, you also get $9981 in additional TAX FREE incentives, over and above all the normal deductible losses that you can claim on any investment property.
So, what you end up with is a heavily negatively geared property that is Cash Flow Positive by around 6K, and Tax Free! In other words, you get great tax reductions and you get to build a property portfolio, but it costs you ZERO- it makes you tax free income each year.
You use that surplus Tax Free money to start attacking extra repayments on your PPOR mortgage, and pretty soon you are starting to make a big dent in paying down your mortgage.
All that's required is equity. If you have enough equity to buy 3, 4 ,5, you get 3,4 or 5 x the tax deductions and you get 3,4 or 5 times the 6K CF+ per year. Obviously, that would mean you;'d be able to pay down your PPOR debt pretty damn quickly, and repeat, and repeat, and repeat...
The way the incentives have been designed, you get them in full no matter what your taxable income is.
You can start on a first NRAS property if you can access 60K of equity. That would be enough to purchase a 350K NRAS property. 35K for a 10% deposit. 15K for stamp duty, legals, costs plus a 10K cash buffer for carrying the holding costs for the first year.