For property investors in Australia, 2016 brought with it a new addition to the range of options on the property market. Specialist Disability Accommodation (SDA) was one of the revolutionary outcomes of the National Disability Insurance Scheme (NDIS), and it is this range of accommodation that has been made available to private investors.
With exceptional yield potential, this benevolent form of investment is well worth investigating if you’re looking for your next investment property. We explore NDIS property investment, and its benefits below.
What is Specialist Disability Accommodation?
Specialist Disability Accommodation (SDA) refers to the accommodation solution that was introduced under the NDIS to address the critical need for suitable accommodation for Australians with disability. SDA housing is also referred to as NDIS property, and has been designed specifically across four distinct categories.
1) Improved Liveability
Improved liveability homes have been built or have been updated with enhanced provisions for tenants who have sensory, cognitive or physical impairment.
This category of accommodation has highly resilient features for the safety of tenants and their carers.
3) Fully Accessible
Fully accessible properties incorporate a high level of physical access to accommodate the needs of Australians with significant functional impairment.
4) High Physical Support
For Australians who require a high level of physical support, high physical support homes are built and designed with specific provisions to cater for those needs. To assist with providing supportive accommodation for tenants with extreme functional impairment, structural provisions such as ceiling hoists, wider doorways for beds and wheelchairs and assistive technologies are incorporated into this design category.
Every home must be built to a stringent design standard, and be deemed SDA compliant before NDIS participants can move in. At Apollo Investment, we’re with you through the entire process, helping ensure your property is tenanted by the right person.
What benefits does SDA housing offer as an investment?
NDIS homes can provide investors with all of the standard benefits that any other investment property can provide, such as:
The potential for capital growth as the property increases in value over time.
Income yield by way of rental payments made by the NDIS participants who call the property ‘home’.
The same tax incentives that investors are able to utilise on other investment properties.
Specialist Disability Accommodation also offers some unique benefits:
A growth potential that is uncorrelated to the standard residential property market. SDA housing is in high demand, so the SDA market will not follow the same market highs and lows that the residential market will, allowing a level of diversification in your property portfolio.
Sustainable long-term returns thanks to funding by the Australian Government.
The ability to provide a forever home for Australians who may otherwise be left to live in aged care facilities.
What is the demand for NDIS housing?
The NDIS publishes the latest demand data for SDA homes on its website. The data is highly detailed and shows demand for each of the four categories of SDA across Australia.
A La Trobe University study found that:
The supply of SDA needs to increase by 60% across Australia to cater for the expected number of NDIS-funded SDA participants. There are currently over 28,000 people who require specialised housing.
The majority (two-thirds) of eligible SDA recipients are aged under 45.
Unfortunately, the current shortage of special disability accommodation means that many eligible SDA recipients are forced to live prematurely in aged care accommodation instead. Many others are forced to live in homes that don’t have all the facilities or provisions to cater for their high care needs.
More on SDA properties & the NDIS sector
If you’re curious to learn more about NDIS properties, we answer some frequently asked questions.
Who funds the NDIS?
The NDIS is funded by the federal government. Significantly, it is a scheme that has bipartisan support. This means that the NDIS will remain in place regardless of which political party is in power. This support provides SDA property investors security over the funding which supports the high yield potential on SDA properties.
Can you decide what type of SDA you build or buy?
Yes, you can build or buy in any of the four SDA categories, but the dwelling must be approved by an independent SDA assessor before it is eligible for tenants. Our research identifies the best property type and the best locations.
Who are NDIS service providers?
There are a range of lifestyle and medical professionals that provide care and support for NDIS participants who are known as NDIS service providers.
Who pays the renT in an SDA home?
Private investors are understandably drawn to the government-backed returns that SDA investment can provide, as this is a differentiating factor to homes available on the open market. SDA funding provides SDA payments to contribute to the costs of NDIS properties.
These payments are supplemented by the reasonable rent contribution that NDIS participants are required to pay (often, directly from their disability pension).
How to add an NDIS property to your property portfolio
If you’re looking at your investment options in the near future, then consider an investment that allows you to achieve both your investment objectives as well as your ethical objectives. Due to the unique nature of purchasing or building SDA homes, it’s important to work with specialists in the SDA investment property market.
At Apollo Investment, we provide an end-to-end NDIS investment service that puts you in touch with market professionals to ensure that you source a high quality property, with positive returns and a positive social outcome. Reach out to our team today to discuss the benefits of NDIS property investment in more detail.