News

January 9, 2023

Co-Living Property Investment vs NDIS Housing Rentals

For years, the target demographic of property investors was largely geared towards family homes. But with so many singles and childless couples on the market, rental prices for large family homes are out of reach — with more and more renters looking for co-living properties.

One of the most innovative forms of co-living is specialist disability accommodation. We take a look at the differences between specialist disability accommodation and co-living properties.

What are Co-living properties?

Co-living housing is an emerging housing typology in Australia that provides members of the community access to private rooms and bathrooms within a living space without the need to fork out the rental price of a residential family home.

Generally, a co-living property will have private and shared spaces ready for tenants to move into and are usually fully furnished. Young professionals and key workers are often drawn to co-living, as it provides small private rooms complemented by shared spaces and built in highly connected areas, close to work, recreation and study facilities.

For older Australians or singles in their 50s, co-living supports a sense of community, incorporating shared indoor and outdoor spaces while keeping the rooms and bathrooms private. A manager is usually employed to support the sense of community amongst co-living properties.

Co-housing investment

Investing in co-housing is slightly different to the traditional approach to property investment. People often confuse co-housing with ‘rooming houses’ — the main difference is in the council approval process and some other features, including lockable rooms.

The main drawcard for investors is that they can attract higher rent through co-living houses than they might with a single property otherwise, where the additional space is being under-utilised. Utilising the full space in co-living properties is what helps to increase the rental income.

For example, a 4-bedroom property that may advertise at $600 per week on the standard residential market, with one lease agreement, may fetch $275 per week per room with four separate rental agreements, bringing the total income to $1,100 per week.

co-living properties

What is specialist disability accommodation?

Specialist Disability Accommodation (SDA) is the name given to the housing scheme introduced under the NDIS, that provides suitable and appropriate housing for Australians living with disability. The needs and preferences of those with extreme functional impairment or very high support needs are addressed with the NDIS design standard.

Like co-living properties, SDA properties can accommodate multiple tenants, with each room in an SDA dwelling remaining private (including its own ensuite bathroom). Also similar to co-living properties, SDA homes’ locations are typically close to amenities such as recreational centres, shopping precincts and public transport.

The fundamental difference between typical co-living properties is that an SDA dwelling is built to specific guidelines to include the necessary provision to support NDIS participants with functional or cognitive impairment. Without SDA housing, many people with disability end up in aged-care facilities prematurely. This is why for most NDIS participants, an SDA home often becomes their ‘forever home’.

To be eligible to rent an SDA home, NDIS participants need to apply for SDA funding within their NDIS plan. Once approved, they work with the relevant NDIS services to source vacancies in the SDA market.

NDIS property investment

For several reasons, investing in NDIS properties is unlike either co-living properties or the standard residential market. The fundamental difference is that the high rental yields are backed by government funding. This creates exceptional yield potential between 10-15% pa!

NDIS providers are paid different supports, depending on the requirements of the SDA home and the funding allocated to each participant. Tenants are also required to contribute to the rent through payments called the reasonable rent contribution.

There is high demand for SDA properties in almost every state and territory location. With thousands of Australians requiring specialised housing, investing in an NDIS property means that investors can access properties that work in a market that operates entirely separately from other properties in Australia.

More information on NDIS property investment

Supply and demand for all properties change frequently, and SDA homes are no different. The NDIS frequently reports changes in the supply and demand of SDA homes. You can find out more by using the government’s SDA demand data tool.

As NDIS property investment specialists, we help hundreds of investors navigate the complexities of investing in SDA properties. By providing an end-to-end solution, we ensure that socially-focused investors can achieve the ethical and financial objectives they set out to.

Have a conversation with our team about how investing in the lives of Australians can reap financial benefits for your property portfolio, too.

Get in touch with our team for more information now.

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