NDIS property blogs
NDIS Property Australia

NDIS Property, otherwise known as SDA Property, remains an incredible investment opportunity for you and or your SMSF.

DID YOU KNOW : “Participants are getting very choosy as to where they want to live and in what they want to live in ?!?!

Location to suit NDIS / SDA Property

Choosing the ‘right’ location, as simple as matching what your budget will allow, to a suited location, where there is identifiable demand, and a low supply of SDA’s.  Easier said than done.

If this is a yield strategy investment for you, it makes investment sense to remove emotion when identifying where to invest. It also makes sound investment sense to invest in locations that adequately tick the NDIS requirements, the needs of the person with disability and their carers needs to. When you put them first, they will come.

Participants are getting very choosy as to where they want to live. And carers do not like to drive more than 10 minutes to participants or from participants to the infrastructure.

Be mindful, if you were a participant : “Would you want to live isolated out in the Stix somewhere, just because someone built a SDA home there?”  Probably not, so why would you expect a participant to live isolated from their community and infrastructure that improves the quality of their lives!


What is a ‘Realistic Budget’ for an SDA, to mitigate Risk?

Where the NDIS / SDA Property market is sitting at in terms of land value and build costs, a realistic budget of $950k to $1.3m is required.

Why? Build cost is build cost and for a home built above minimum specifications (highly recommended by the industry), and on a generous floor plan – one cannot get away from the average cost per sq/m to achieve this. Disability Category dependent and number of participants taken into consideration of course.

Why? Land value is Land value. The further out you are from a regional or capital city, the cheaper the land (the higher the risk of less participants and higher supply of SDA’s), and thus the higher the Yields quoted on paper.

The closer in to a Regional City or a Capital City, land is always more expensive. The demand closer into these CBD’s is way higher than out of town, you may acknowledge.

There is also less competition for you, if you are an astute investor, because sales companies are appealing to 80% of investors chasing high yields and selling SDA’s further out of where the participants are and also further out of required infrastructure.

Closer into CBD’s and infrastructure there is a higher demand and also a lower supply. This strategy mitigates your risk and could thus give you higher occupancy over the life of your investment.

Hoping this makes sense for you?

some Queensland SDA’s available

click here

What is my risk?

When talking with prospective clients, one of the main concerns is “risk of building a purpose-built NDIS property and not being able to get participants!”

And rightfully so !!

BUT

What these same prospects then go onto ask for, is exactly what they are wanting to avoid??

No, this does not make sense. On review, what we realised a couple of years ago, is that most of these same want to be investors in this incredible NDIS space are chasing yields quoted on the NDIS SDA Price Calculator. Which is what a NDIS property can offer you on paper.

Unfortunately, they just do not know, what it is that they do not know about NDIS property investment. If they did, they would reverse their strategy. Start off with Location. If they know what we know about this investment space, not only would they mitigate risk of finding participants, they will also enjoy consistency of Occupation. Meaning more income over a longer period.

And no, it’s not going to be the “projected income, that the sales company is showing you from the tables !”

That is merely potential income you may get, if all the so-called ‘stars were aligned’ on your investment. The upper end potential. REALITY is proving very different!  Have the sales group actually shared Market Reality with you in terms of actual market statistics around NDIS income on SDA Property or just showing you what the NDIS table states?

Are these sales groups still deliberately appealing to your greed, based on touted potential income still? If yes, perhaps you wanna run the other direction?

At properT network, we deliberately refrain from telling you what you want to hear. We sleep better at night in doing so. Sharing actual market statistics with you on Participants and potential incomes. The NDIS SDA Price Calculator is merely a guideline, not fact, of what you will get. Were you aware of this?


From the NDIS’s perspective; how do they see it ?

NDIS properties play a vital role in supporting the Australian disability sector and by you investing in a NDIS property, you not only gain financial benefits, but you also contribute to social welfare by improving the living conditions for people far worse off you and I, who have a disability.

The NDIS market is expanding rapidly due to more investors becoming aware of it. This in turn has brought forth a plethora of ‘sales and marketing’ companies wanting to make a buck out of it.

The NDIS have a purpose for NDIS property in that their requirement is :

  • The primary purpose of this incredible NDIS programme is to give Participants Choice of where they want to live, and an ability for a Participant to Thrive in life.
  • To purpose build an SDA home, built fit for purpose and on a generous floor plan.
  • In a location where there is adequate infrastructure to support the lifestyle of your participants.
  • Build a participants “forever home” in locations with demand and low supply.
  • Build to suit the category you are targeting. Avoid generic floor plans.
  • Bring a new fit for purpose designed SDA property to market, in which your Participants will thrive, whilst calling it their forever home.

*Any less than this, you would not be providing what the NDIS want you to build.


Location

What you may notice is that these same sales and marketing companies are offering to sell you and build, tend to be far away from Cities and Town Centres. They do this because land is cheaper further out, and so the yields on paper look excellent. They do this without a duty of care to you. They do not care how many other SDA properties are being built in the same location either … meaning a potential disaster for your hard-earned dollars and your investment strategy you thought you were going to achieve. Is this the purpose of your intended investment?

Think about this major issue; land further out located in green belt new suburbs, SDA’s these sales groups are pushing for you to buy :

  • We know that these NDIS benefits, for an SDA property, are only applicable to 18 year olds. And not the full benefits either.
    • Full NDIS benefits kick in from age 21 only, to under 65
  • Keeping this in mind, ask yourself who the primary demographic are, living in these new green belt suburbs popping up?
    • When you do your research, you will notice that the majority of buyers living out there are “young families”, due to affordability and the need for a house. Yes? Good …
  • So how many young families living in these areas will have 18 year olds?
    • Logic tells us not many, you could agree.
  • Now ask yourself, how many of these families with 18 plus year olds, have disabled children?
    • Again not many you may agree.
  • Further to this … how few actually qualify for SDA allowances. Meaning that they can become your Participant so you get NDIS funding?
    • If the stats are only 6% could qualify for SDA
    • This means 6% of a few families out there with 18 plus year olds.

*FYI : “if you did purpose build an SDA home in these areas, you would be better served building for one adult participant. There would be families in these developing areas who have one adult partner with disability.” Sure your NDIS income is a lot less, but would be more than having an empty SDA home built for two or three participants in this same location. No one is building these types of SDA’s, especially investors chasing high yields.

Ask yourself : “Does the Risk increase when chasing after higher yields?” … OR … are you Mitigating your risk by investing in these outlying new and newer suburbs where primarily younger families are living, because yield on paper is excellent and a lower cost of buying is appealing?

Market statistics confirm the answer to the above scenario!  You just need to become aware of it.

It thus makes investment sense to find land closer in (yes, at a higher land price), mitigate your risk and be comfortable with the fact that the yield being quoted by them as per the NDIS SDA Price Calculator, is not going to be as high as a package being sold further out, where there are way less participants available.

What if you chased higher occupancy and consistency over the life of your SDA investment, which could be 20 years, rather?


SDA Provider Market Feedback

SDA Providers are sharing their data with us on where the demand is, where to avoid, Participant and Carer feedback, vacancy rates and more.

This data is vital and invaluable to you the investor, wanting to invest in a SDA property.

A new emerging fact is that the Participant and or the Participant and Carer will go to view a property and if the location is unsuited, they will not even go look. BUT more importantly, as more SDA’s are being completed, they will go into the home, and if the Floor Plan does not suit, they will not take the property. They now have choice of where to live!

What this means to you is :

  • Location is imperative.
  • Evaluate the market and demand in location you are wanting to invest in.
  • Suited generous floor plan a must.

  • Avoid locations further out without necessary and required infrastructure to support their lifestyle.
    • You can build it, but will they come?
  • Avoid smaller internal floor plan space. Avoid cheap builds with cheap finishes and fittings.
    • You can build it, but at what long term cost to you and your investment?
  • Avoid “Generic Floor Plans”!!   These are the latest trend sales companies are offering prospective clients like you.
    • There is no Single Style Generic floor plan to suit the 4 different disability categories.

Having said this, it is widely accepted that you can build for HPS and accommodate either Improved Liveability or Fully Accessible.

We continue to see packages being marketed with floor plans ‘designed’ to suit either Robust, HPS, IL or FA. Ask any carer if this works?!


Thinking about investing in a Robust Home?

what you need to be aware of … click here


NDIS Housing Hub Survey summary

Click here to read the Key Points from the Housing Hub Survey conducted in November 2023, for further insight into NDIS property.


If not NDIS Property, what Investment Property makes investment sense in today’s market?

SDA Property does not suit everyone. This we know. Meaning if not a NDIS property, you may want to consider other options to grow and secure your future wealth such as :

  • SIL Homes
    • 7-9% yields
  • Co-Living Houses
    • 5 – 6% yields
  • Dual Keys
    • 5 – 6% yields
  • Duplex
    • 5 – 6% yields
  • House and Land
    • 4.5 – 5.5% yields

Yields on the above range from 4.5% to around 9% plus capital growth potential.


properT network do not work off lists or hold properties … Quality Land in Australia is difficult to come by; Quality Land to suit NDIS Requirements even more of a challenge !!

our strategy is to source land in locations with demand and low supply.

Further Reading