Standing at the precipice of your next investment venture can be an exciting time in any investor’s life. Before diving in though, it can really pay to make sure you’ve got all the tools you need to build a reliable investment that will last you years to come.
If you’re planning on making an NDIS property your next investment, then keep reading as we provide our top 4 NDIS investment tips for you to form a concrete investment foundation upon.
1. Do your research on the National Disability Insurance Scheme (NDIS)
When starting out your NDIS SDA property investment journey, it’s logical to start at the beginning. Your attention has probably already been raised to the fact that you can achieve outstanding, Australian Government-backed returns, but are you aware of how SDA properties came to be?
It might surprise you to learn that 1 in 6 Australians have a disability, but what might shock you is that often, without suitable housing to accommodate their disabilities, Australians living with disabilities are often placed into nursing homes.
The NDIS provides support and services (including funding) to Australians with permanent and significant disability. The need for specialist dwellings was identified, which gave birth to Specialist Disability Accommodation (SDA); a range of housing designed for Australians with very high support needs, extreme functional impairment or significant physical impairment.
The Government intended for the specialist disability accommodation scheme to encourage social and economic participation through private investment.
As you step down your SDA investment path, there will be many NDIS investing terms to become familiar with.
NDIS Service Providers
An NDIS service provider is an organisation, or an individual who delivers support or products to NDIS participants.
Perhaps assumedly, an NDIS participant is a person with disability who is participating in the NDIS.
SDA providers are individuals or organisations who essentially act as landlords to provide SDA dwellings to SDA participants. They receive the SDA payments.
2. Understand how specialist disability accommodation works
Due to the serious lack of suitable specialist disability accommodation, eligible NDIS participants who require specialised housing are able to apply to participate in the SDA scheme.
SDA housing is required to meet strict guidelines, and is built across four key design categories:
- Improved Liveability
- High Physical Support
- Fully Accessible
Each SDA dwelling must be deemed SDA compliant, with SDA providers needing to register with state and territory authorities, and meet the building codes and laws associated with whichever local government authority they are building within.
3. Know what to expect from your NDIS housing investment
Any investor looking at their NDIS investing options will likely be concerned with two main factors: capital growth potential and yield. Property investors will unquestionably be interested in the potential rental yields, which is where SDA homes truly come into their own.
No other investment property is backed by the Federal Government, meaning that you can reasonably expect to receive high rental yields above 10% per annum (which is generally a lot higher than returns from a standard investment property). SDA funding is expected to be worth approximately $700 million per year!
When NDIS homes are tenanted by an SDA participant, the tenant is required to pay a reasonable rent contribution, which contributes to the rental income of the property. The NDIS will also pay SDA funds to registered housing providers, so long as the home is compliant.
4. Partner with professionals in NDIS property investment
Investing in SDA housing is more complex than a standard residential property, as you are bound to the rules and legislative framework imposed by the National Disability Insurance Agency (NDIA), which administers the NDIS.
Sourcing all of the required information, navigating the SDA rules and understanding the intricate planning and processes that need to occur before you purchase approved SDA housing is significant. Many private investors can become overwhelmed with the level of planning involved, which is why seeking relevant industry professionals, such as Apollo Investment is one of our top NDIS investment tips.
Our team’s knowledge and expertise serve to deliver a measured, stress-free solution, producing a turn-key property complete and ready for NDIS approved tenants. We can also help put you in touch with a specialist property management firm to assist with the ongoing management of your property, as NDIS properties are required to be managed by an NDIS approved property manager.
How to make an SDA property your next investment property
If you are keen to know more about how an NDIS investment property can revolutionise your investment or property portfolio, as well as the lives of disabled Australians, then book a call with the team from Apollo Investment.