NDIS Property otherwise known as SDA Property remains an Excellent! investment opportunity.
We know that not all property is investment grade, meaning only selected properties are worth investing in.
The same applies to NDIS Property. A significant amount of SDA’s being packaged and offered out there are definitely not worthy of your Investment Dollars !! We know this because of what we do know about all things SDA and NDIS. But do you?
OK, so “how do we know which ones are and which ones we need to avoid, you may be asking?“
And rightfully so.
Because in life, when we don’t know what it is that we don’t even know we don’t know, how do we make the important informed decision?? Do you agree …
If you are talking to a marketing and sales company, then perhaps take a big step back prior to signing anything with them. Just because someone has packaged it up and is selling it, just because someone can build it, that does not mean that they should, NOR does it mean that you should buy it !
AND just because ‘on paper‘ they are showing the income potential of that property, it does not mean that, that is the Income you will receive !! Let the buyer beware.
Is NDIS Property all that it is cracked up to be?
In short, the answer is : Absolutely and also Absolutely NOT
What do we mean by this?
If you choose to strictly follow the Purpose and Requirements for SDA Property (NDIS Property), you will source land in an area with REAL demand, where supply of SDA’s is LOW, and build a well suited floor plan for your participants. Then the answer is a certain Yes, it is all it is cracked up to be and perhaps more.
On the other hand, if you chase the high yields on paper being spruiked out there, offering you house and land packages from $750k and incomes up to $180,000 … how could you resist this??
PURPOSE OF THE SDA PROGRAM UNDER THE NDIS
Let’s go back to the Purpose of the SDA Program …
“To build SDA homes close to required infrastructure, in which a participant can live comfortably, calling it their forever home, in locations and homes in which they can thrive.”
What this means to you and to us, is you would want to avoid properties which are further out in greenfield areas for a few reasons such as :-
- probably far from a participants community and family,
- not near to required infrastructure so that they can live and thrive,
- very little to no public transport,
- and a major factor is these greenfield communities are made up mostly of young families.
Why is this a concern? Are you aware the age a participant needs to be in order to qualify for a SDA package? This excludes young families who are enrolled in the NDIS program.
Now take a look at the demographics of new suburbs, primarily young families yes?
Do you now also identify the looming issues these marketing companies selling house and land SDA’s / NDIS in these locations are creating? Cheaper land, cheaper packages = high yields (on paper!) appealing to investors greed, or fear of missing out. This is why you need to take a step back and revisit the opportunity without those rose tinted sunglasses.
Not only this, they are also selling multiple homes for NDIS in the same locations because the land is cheap, the package looks cheap and the yields as a percentage look very high – thus creating competition for you their very own clients ?!?!
Ask yourself, “Where will the participants come from?”
The first major wave of SDA’s that were under construction are either recently completed or close to completion. This will be the litmus test for the industry.
There will also be a lot of ‘horror stories’ of clients buying SDA’s and not able to get participants as promised. This has the propensity to place an ugly stain on what is a much needed and brilliant government initiative, and sadly so. Wait until A Current Affair gets a hold of these stories.
What we are noticing and hearing in the industry is that the homes built on a good floor plan, and in a location close to the infrastructure are being snapped up by Participants and their Carers. There are also far less SDA’s in these areas because the entry price was high, based on purposefully chosen locations to suit. But there is also a lot less competition, meaning low to no vacancy rates and a successful investment. This strategy is proven to work and mitigates risk.
Yet those further out are struggling to get participants. Now you know why.
Not only are those further out struggling to get participants, but there are several houses completing in the same vicinity, they too will suffer the same fate. Their own marketing company who sold them this SDA, sold many others in the same location. This we know is creating major competition for their very own investors?!?!?
NB : Just last week we received an inquiry by a desperate investor who bought into that company who proliferates Facebook with their ads. They shall remain nameless, but according to the purchaser whose Robust SDA, built for 4 participants, in a location with plenty of other SDA’s completed or completing, just cannot get participants.
(You may not know it but it is very difficult to accommodate more than 2 Robust participants in one dwelling, let alone 3 or more.)
When she queried their upfront promise made about plenty of Participants, they answered “The market has changed!”
Really??? This company is the one who has sold most SDA’s in that location, they created this competition for their own clients and now blames the market. Cry or Laugh??
BUT the client now has a very expensive paper weight on her hands and no solution given. This company has their fees they made from the sale to her and no solution to get participants as promised upfront.
Go figure. Zero care, zero responsibility and they continue their Facebook adverts and continue to sell heavily into locations you and I would avoid, knowing what we know that is going on in those locations.
As you may be aware, we predicted this scenario a long time ago and continue to ‘educate’ you our potential client to be conscious of this ‘trap’ of a low-priced package so yields look fantastic on paper – we still advocate strongly against this.
Market Reports on Demand / Stating they have Participants waiting
- You may want to read this article we recently published on so called Market Reports on Demand. How valid are they? Read and watch video explainer here
- Anyone who tells you that they have Participants ready to take your property you want to see a written guarantee, a signed Rental Agreement or a signed Head Lease Contract up front!
In all my blogs we clearly state “just because someone is selling it and can build it … it doesn’t mean that they should, and it certainly doesn’t mean that you should buy it!” We still strongly advocate this. As does the NDIS industry (aside from these sales and marketing companies who just want to sell you something and you end up carrying the proverbial can).
“We have participants waiting”
Those of us who are ethical consultants in this complex, exciting space always smile when a sales and marketing company tells you this. From vast experience, we know the reality, but we ask you when you hear this, “What do you believe? And what does that even mean to you?”
To me it sounds like they definitely have tenants waiting, on your build, and once it is built you will have Participants in place. No worries.
Have you ever asked them for a written guarantee on this over promise / statement?
If you have, has any of them ever provided you with one?
We all know that Participants are human yeh, and as humans in the next 12 months we may get sick and need to be hospitalised, we may move to another suburb or city, we may die and we will certainly grab the first SDA house that comes available in our location and we will not wait until the one you are building will be done.
When you are told that there is a participant waiting – we suggest you ask for a written and signed Rental Agreement or Head Lease Contract, on the home they are selling you. Hey, if you get one, grab it but make sure your lawyer agrees it is watertight before you sign anything yourself.
Sad Market Reality for NDIS Property
Inquiries we are getting, inquiries other groups we are aligned with are receiving, inquiries SDA providers we work with are getting, are coming from investors who were over promised and are yet to receive what was promised.
Wrong Location’s and or wrong floor plans or a combination of both are the issues at hand with these inquiries. They were sold something, just so the sales company could make an irresponsible dollar!
More and more inquiries, as SDA’s are completing and coming onto the market, are from investors who cannot get Participants, or may have only one participant placed, and or at a low level of funding and are unable to secure others. This is affecting their investment and their cash flows, as well as their morale’s in what should have been an exciting, sound investment opportunity for them.
They have invested significant dollars on misleading marketing, perhaps naivety on the sales company part, or through greed of high yields being touted on paper, and are now discovering reality.
You can avoid this trap.
NDIS Property otherwise called SDA Property remains an incredible, beneficial investment opportunity and a do good investment that will accommodate someone far less fortunate than us. It is best to get your decision making correct from the outset, of this fact we hope you are becoming aware is a vital requirement.
When you get to know what it is that you do not know that you do not know, but need to know about this complex, yet brilliant investment opportunity, then you are in a solid position to make that informed investment decision. This strategy has the propensity to cost you a helluva lot or to make you in the Millions of Dollars. Which do you chose?
NDIS – your Investment Opportunity
What makes for a sound, risk mitigated SDA Property, I need to be aware of, and how do I get to make an informed investment decision? What should I be doing differently to achieve this?
- Choose to work with professionals like ourselves who have
- The Participant Interest at heart, as a priority first up
- Source Land and Build based on the needs and requirements of the Participant
- Professionals like us who then have the Carers interest at heart next
- Source Land and Build based on the needs and requirements of the Carer
- The Participant Interest at heart, as a priority first up
- Professionals like us who get to understand what you are wanting to achieve
- Your risk profile
- Your investment strategy and purpose for your investment
- Your budget
- Expectations, likes, dislikes etc
- Professionals such as us who have been in this complex investment space since private investors such as yourselves first started looking at NDIS Property, over 4 years ago.
- Who also have extensive “Investment Property Experience”, we have just over 17 years now in the investment property space as professionals helping our clients build investment property portfolios by investing in Investment Grade Property, saving them time, helping them make more money.
- We have deliberately surrounded ourselves with like minded ‘industry aligned partners’ who also have vast knowledge and experience, work ethics and more, for the purpose of helping you our client save time, be more educated so that you can make more money.
- Who also are passionate about you, our client coming to an educated and informed investment decision for the purpose of you reaching your own financial planning goals. We thrive on you becoming successful.
- We deliberately tell you how it is, we deliberately do not tell you what you want to hear.
- We strive to under promise, we work hard to over deliver and we are incredibly committed to your success.
Services we provide
- As consultants in this incredible space we offer to review any offers you are considering from sales companies, or looking at that may be completed, prior to you signing the contracts. We will provide transparent feedback and challenging questions you would want to ask of the sales company for the purpose of you making an informed decision.
- Matching your purpose, goals, investment objectives, requirements, budget etc to a selection of ‘best fit’ SDA / NDIS properties to match.
- Introduction to professional mortgage brokers in this space. It is highly beneficial for you to work with a mortgage broker who has vast experience with SDA loans.
- Introduction to SDA Providers to help you source Participants for your NDIS Property.
- Introduction to solicitors to Review Contracts.
- We will source Land to suit your investment requirements.
- We will offer a floor plan and home design that has been honed and improved upon based on Carer and Industry feedback.
- We bring in the builder and ensure the design is Compliant and gets certification.
- Introduction to a building inspector at completion to assist with your final inspection.
- Introduction to a Q.S. for your required depreciation report.
- And as we have been in business for over 17 years, we are always here for you during and after, to ensure your investment experience is a solid one.
to investors wanting to invest in NDIS Property
“Just because someone can build it, it does not mean that they should!”