Firstly what is SDA Property under the NDIS?
SDA Property (Specialist Disability Accommodation) incorrectly referred to as NDIS Property, is specialty accommodation for people with disability who require housing solutions to meet their disability classification.
It costs the Australian Government around $1 000 000 (yes $1million) per year to house one person with disability in a facility.
Outside of these facilities suitable accommodation is just not readily available. These properties are purposefully built to comply with stringent requirements under the NDIS and then made available to participants who qualify under the National Disability Insurance Scheme (NDIS).
Did you know it costs you the tax payer around $1,800 per day to accommodate a person who is paraplegic and in hospital as they have no where else to go?
Government Incentive for you to put your hand up to build and own a dwelling which complies and then houses participants is around $38,000 per annum to you. This is one helluva savings by government of tax funded dollars you would logically have to concur!
Now picture what from the outside looks like a normal house in your local suburb, yet internally it is built to provide full functionality to the participants to lead as normal life as possible within our communities. Some of these dwellings (houses or apartments) will accommodate 2 to 4 participants and often a carer and for each tenant the government is giving you this $38k … hence yields of 7% up to and over 20% are realistic and achievable.
NB : this is not as simple as I have just alluded to and it makes investment sense to work alongside a professional firm like ours to discuss your requirements and point out what just does not work and also what does work that will then meet with your investment needs.
Whenever the government start ‘giving’ out $’s out come those who over promise so that they can take advantage of your greed or fear of missing out. Be warned, remain realistic in the return on investment and the type of dwelling best suited to a consistent and realistic yield!
The NDIS is a Federal plan brought into effect in 2013 for the purpose of providing people with a disability choice and control over aspects of their lives that able-bodied people take for granted. Having access to a custom purpose built home goes a long way in allowing people in this demographic to gain independence and improve the quality of their day-to-day lives within and amongst our communities. How good is that!
There is a chronic undersupply of SDA Property under the NDIS
Sadly
The NDIS is chronically under-supplied with dwellings to suit people with disability!
There is a vast shortage of SDA Properties especially providing quality, custom-built homes to appropriately cater to its participants. According to a study undertaken in March 2018, the report identified that 28 000 eligible NDIS participants were living in inappropriate accommodation for their needs.
There are tragically 6 000 young people with disability living in Aged Care Facilities !!! Too sad!
This report cited that in order to house those people alone, existing supply would need to increase by 60%. That is massive and demonstrates that there is just not enough suited accommodation to house what is a growing need.
Further compounding this problem (with over 400 000 people identified who are disabled and could be qualified as a NDIS participant) … this number continues to grow as the Australian Population Grows.
Compound this with the advent of modern medicine which is keeping people who would have passed away sooner alive for longer. As great as this is for the participant, it places further strain on required accommodations.
Can you see the growing problem here, and we know for every problem out there is someone else’s opportunity.
Investing in these types of properties not only caters to a growing requirement in the community but is potentially one of the best ‘feel great’ investments you could make in terms of helping out someone fare less fortunate than you or your children whilst at the same time growing your capital. A win-win-win for all!!
High Rental Yields
As mentioned above, for putting your hand up to own a SDA Property as an investment, when it is the ‘right’ type of dwelling, will return yields from around 12% pa (where there is a rental guarantee period offered) up to 16% and higher.
What other type of investment vehicle out there (with as low a risk profile as property has over 7 – 10 years) which is underpinned by an asset which includes land and a dwelling, will provide you with this type of return on your investment?
Risk Mitigated
AND further to the above :
- Once your dwelling receives it’s compliance certificate the government classify your dwelling under the SDA category for a period of 20 years, meaning you will continue to receive these yields during these 20 years whilst you have tenants in place.
- After 20 years, your dwelling may continue to house participants with disability and at a reduced rental yield.
- On top of this during the 20 years, your Yield is linked to CPI! Meaning rental increases during the life of your investment.
- Risk mitigated as this falls under the NDIS scheme which is not going anywhere. Which government has the ability and the ‘balls’ to can the whole NDIS scheme? For you sceptics, this investment is definitely not for you!
- Law promulgated by the Australian Government has pledged $700 000 000 per year, for the next 20 years to help provide Specialist Disability Accommodation Dwellings to help alleviate the current and growing shortage of suitable accommodation for people with disability.
Doing something great and getting paid for it is the most rewarding thing you can do
Your feel Great Investment
This is a win for your tenant who gets to participate in the NDIS scheme and is fortunate enough to become one of your tenants.
This is a win for Government and of course You the Tax Payer, in that there will be massive savings to the Australian budget when a participant becomes housed in a SDA Property.
This is a win for You! A most recent completion of a SDA home in Toowoomba under the High Care classification was fully tenanted at the time of completion and handover returning the investor $135 000 per annum on an investment of just over $600k. This is significant in terms of yield and in terms of participants now living in and amongst their community in very suitable accommodations !
NB : Find a professional group who is fully versed in the NDIS and in SDA Property, offering you the complete end-t0-end service of sourcing a property to meet the requirements of care providers, who are aligned and have relationships with care providers who will provide the participants, who are aligned with builders who understand the stringent build requirements of a SDA dwelling, ensure that there is a demand for that type of dwelling in the area, and lastly with a qualified SDA Rental Manager who is licensed to rent out and manage your SDA Investment Property. Getting this mix right is vital to your success.
