Popularity of NDIS Property Investments in Australia (SDA)

If you are looking for a sustainable property investment strategy, you might want to consider NDIS property investment. Sharp investors who are seeking high returns know that NDIS SDA investment properties come with great opportunities. If you are interested in NDIS, read on. 

NDIS investment property is not as straightforward as traditional house or land. However, it has a huge return potential and it helps people in need. 

The most common question is what is NDIS and how does it work? Well, NDIS is an abbreviation for the National Disability Insurance Scheme. The program supports people with disabilities, their next of kin and caregivers. It was launched to offer a lifetime solution to the well-being of disabled people. 

Specialist Disability Accommodation (SDA) is an important aspect of the NDIS. SDA is accommodation meant for persons who need specialist housing solutions that cater to extreme functional disabilities while offering high support needs. There is an eligibility criterion that NDIS participants must qualify to get the SDA funding. 

Simply put, SDA Housing is all about providing sustainable solutions to persons with high/extreme functional special needs.

Benefits of NDIS Property Investment

Being an SDA investor comes with many advantages. There are many perks in addition to the opportunity traditional real estate investment provides, while assisting people who have physical limits to live more comfortably. The scheme’s sole purpose is to rehouse people with special needs into accommodation that suits their physical needs.

The housing could be a house, villa, group homes, apartments, legacy stock, townhouses or Duplex. As an investor, you can own approved SDA housing and lease it to approved persons. Note that the NDIS can only pay SDA funds to a duly registered provider with an enrolled and compliant dwelling. 

SDA Housing Provides Higher Rental Yields 

To meet the criteria for the scheme, participants must be found eligible by the NDIS. To make sure that all qualifications are met during planning and building, investors use a Registered NDIS SDA Provider.  

NDIS property is growing into a favourite investment for Australian investors for different reasons. However, being able to gain high returns in a low-risk environment, with long term leases, are the main points of attraction for real estate investors. 

Longer Lease Means Sustainable Income

SDA dwellings have another major perk in that most tenants prefer to lease for longer periods than in traditional houses. This gives you stability as an investor and much comfort knowing your property will be occupied for longer periods. 

Most experienced investors use this strategy to maximize returns on investment. To make the highest possible returns, ensure that your tenants are in for a long-term stay. 

Before and during the process of renting your property out, ensure that you have a qualified SDA Provider. The provider will manage your property in an efficient and compliant manner. 

The primary goal of an investor is to ‘set and forget’ by having someone professionally manage your properties. 

Risk mitigation 

The Federal Government forms part of the National Disability Insurance Scheme. For that, they have set a specific budget for housing and assisting people with disabilities. The scheme is legislation and has been taken as law. 

A lot of risk is mitigated with SDA property, unlike other real estate. This is because it is supported by the government. 

The SDA Housing program is operated by the NDIS and is designed for a 20-year term. Note that the government is not acting as a guarantor of the property or the tenant. However, the undersupplied market for well designed SDA homes provides investors with an opportunity. The returns are better, especially when the tenant stays for a longer than the traditional one year lease period . 

You will only receive the government’s subsidy when an NDIS approved tenant resides in your property. This also means you must make use of an NDIS SDA approved property management firm that will supervise and manage the property on your behalf. All these mitigate the risk on your investments and boost your returns. 

It is a great advantage that the government is involved. However, as much as it support the NDIS initiative, they also insist on all dwellings and Providers meeting the SDA  criteria. 

One of the main advantages of an NDIS approved SDA Provider is that they liaise with Care Providers under the NDIS scheme. The caregivers are responsible for managing clients with disabilities. 

Remember that working with these Care Providers means your SDA property manager can access potential tenants who can be informed of the dwelling, even before the property is completed.   

Pitfalls

SDA scheme compliance

This type of property is highly monitored and regulated. There is a set of standards that must be meet before a property can qualify for rental by SDA approved tenants. This means that the properties can be harder to finance, as compared to regular real estate. 
There is also a strict scheme of compliance to be followed.

Design categories of SDA housing

There are four main categories of SDA housing.

  • Improved Livability – Housing that is designed to improve the livability by providing a reasonable level of physical access and enhanced provisions for people with sensory, intellectual or cognitive impairment.
  • Robust – This dwelling is designed to incorporate a reasonable level of physical access provision and be very resilient, reducing the likelihood of reactive maintenance and reducing the risk to the participant and to the community.
  • Fully Accessible – Housing that is designed to incorporate a high level of physical access for people with significant physical impairment.
  • High Physical Support – Housing that is designed to incorporate a high level of physical access for people with significant physical impairment and requiring very high levels of support.

NDIS Property Investment Strategy

Property Friends offers solutions for people aspiring to financial independence, choices in retirement or leaving a legacy. So, where do you start with the investment? 

SDA properties are not only ethical and good for the community but they also offer higher returns due to the government subsidy. If you are considering investing in SDA Homes, our real experienced experts can help. 

Property friends will walk you through all the background, government regulations and standards, financial benefits and assessed risks to ensure you gain from your properties.

Want to learn more? Contact us or book a free consultation here

 

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Uwe Jacobs Property Strategist

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