What is SDA
Specialist Disability Accommodation ‘SDA’ is for people with a disability who requires special housing needs to ensure they are able live independently and also receive support they require whilst at home in specially designed or adapted homes to help deliver their support needs.
What is NDIS Funding
The funding for Specialist Disability Accommodation is to provide an investor with an above average rental income for putting their hand up to provide SDA accommodation.
If a client is assessed as requiring Specialist Disability Accommodation, funding will be included in their NDIS plan to cover any disability related housing costs that are above the ordinary costs of housing for them and their support coordinator. Funding is used to source the most appropriate accommodation in the market place for themselves.
How does the NDIS help Property Investors
The NDIS introduces a funding scheme to build new accessible housing for 28,000 Australians with a disability. Housing is delivered through an ongoing subsidy for people with a disability to access hosing. The SDA payments drive the market-driven model where providers create and maintain housing for people with a disability across Australia with a budget of $700 million for the SDA.
You the investor for putting up your hand to provide a NDIS dwelling will receive higher than market rate yields as your incentive. The market requires $5bn to build housing through a transformational policy totally evolving the previous government system which is failing our disabled population.
Your investment opportunity lies in the 16,000 new or refurbished SDA places which are needed. Only a low 650-700 places were sadly created in the past 12 months. There is an incredible need and a very short supply.
Who qualifies for SDA Funding and Accommodation
The NDIS (National Disability Insurance Scheme) provides the SDA funding for people whose disability or ongoing very high support needs require special accommodation which enables them to receive housing, care and onsite support by their carer.
Different Property Solutions modeled to suit varying disabilities
There are 4 levels of NDIS SDA homes each designed for a different level of disability and care :
- Improved Liveability – built to LHA Silver Level
- Fully Accessible – built to LHA Platinum Level
- Robust – built to LHA Silver Level
- High Physical Support – built to meet high level of physical access
Who finds suitable tenants for each property?
SDA Manage Australia (SDAMA) is a specialist property management firm that works with NDIS Service Providers in assisting their NDIS clients to apply for and be placed in suitable Specialist Disability Accommodation. This process starts as soon as the property has been registered with SDA and the commencement of the build, with the intention of having the property occupied as soon as possible after the property is completed.
What is the length of a typical rental lease?
Initial leases will be for 12 – 24 months where possible, but once locked in, they’ve been considered as ‘forever homes’
What makes a forever home for NDIS tenants
NDIS homes are built to a very high standard. They do not present as a hostel or over crowded old style disability housing. These homes are built and designed above a spec home, built to accommodate and last.
Can you guarantee 100% occupancy?
While there is a massive demand and shortage, there are no guarantees. However, based on research undertaken, many disabled SDA residents want to “stay for life”, when they are in appropriate accommodation (mentioned above). This is why they are referred to as their “Forever Home”
What happens if I lose a Tenant?
Like all ongoing investment property ownership, there is always the risk of losing a Tenant. Although research has shown that once someone with a disability finds a home they are happy with, they don’t ever want to move. Once your property has been enrolled and tenanted initially, the NDIS has allowances for vacancy payments (NDIS SDA portion only). The amounts covered are for up to 60 days for properties with 2 or 3 participant rooms, and for up to 90 days for properties with 4 or 5 participant rooms.
How do I receive my payments from an NDIS SDA Investment Property
The SDA payment from the NDIS is a standardised annual amount calculated based on the dwellings location, size and level of accessibility. This is on a per tenant basis.
Payments for an NDIS SDA property are paid through differently to that of a non NDIS property. Your rental payments will be paid to you from SDAMA at the end of each calendar month. Each Tenant’s payment is made up of 3 parts;
- Fair rent contribution: (25% of base disability supplement) Paid Fortnightly by the participant (tenant)
- 100% Commonwealth Rent Assistance Paid Fortnightly by the participant (tenant)
- NDIS SDA Payment (Refer to the NDIS SDA Schedule: Paid Quarterly in arrears
There are different builders building NDIS SDA Homes and there is no official building standard. A good builder will provide a quality home which is compliant with current NDIS SDA built to Livable Housing Australia (LHA) standards.
It takes around 6 months to build a NDIS SDA approved home (depending on in which State and weather). There are Builder’s warranties provided on structure for 6 years and other build warranties and guarantees as per any other property.
Location of NDIS housing
Proximity to transport, shops, entertainment and other essential service sis critical to enabling people with disability to easily leave their homes and live a meaningful life. When investing in a NDIS home, ensure they are within close proximity to essential services and also within other ‘normal’ communities.
Who manages the Tenants?
SDA Manage Australia (SDAMA) is a specialist property management firm who work with NDIS Service Providers assisting their NDIS clients to apply for and be placed in suitable Specialist Disability Accommodation. The service provider needs to be registered under the NDIS meaning your local agent who is not registered cannot manage the property. SDAMA hold the Head Lease which you sign, which then enables the property to be sublet to suitable SDA approved Tenants.
SDAMA deal with all of the SIL Providers who match suitable tenants by disability, personality and requirements. Ideally suited to specific category of NDIS property.
SDAMA charges a management fee of 8% plus GST of the gross rental income. The Landlord is responsible for maintenance and the tenants for damage, as per any other investment property.
A typical lease will be for 12 – 24 months. The research indicates a tenant will stay for much longer based on scarcity of this type of housing.
The SDA policy is an ambitious initiative requiring $5bn to build housing. Government cannot achieve this and thus launched the $700m a year NDIS Scheme to create an investor and user driven market. Empowering people with disability to decide where they live and who they live with.
The package of support includes annual funding to pay for the cost of their housing where the participant has a separate amount in their package to pay for their attendant care support needs to live independently in our communities.
It is anticipated that the SDA pricing and framework will continue for 20 years, after which your property will revert to the general market.
You enjoy a combined revenue from SDA payments, Reasonable Rent Contributions and then the proceeds from the sale value of the property when you choose to sell. The housing market is developing for people with disability accommodation needs and is highly underfunded. The NDIS is radically transforming thousands of lives for the positive in an inflexible market where these consumers have limited choice.
A planned shift from segregated and institutional disability housing and a major move towards genuine choice and community inclusion through NDIS SDA property. Transformational for a person with disability. And a feel great investment for you the investor.