News

March 20, 2023

What’s a Realistic ROI for NDIS Investment?

Specialist Disability Accommodation (SDA) is one of the most revolutionary programmes to come from the National Disability Insurance Scheme (NDIS). It’s understandable that some investors are dubious about the double-digit rates of return that are frequently presented when discussing NDIS property investment.

However, with bi-partisan federal government funding of up to $700M per year, you may be surprised to learn that the return on investment (ROI) of an SDA investment property is as strong as quoted in literature.

As NDIS property investment specialists, we are happy to discuss what a realistic ROI for NDIS investment is.

NDIS property investment explained

Shortly after the NDIS was introduced in Australia, the National Disability Insurance Agency (NDIA) introduced the Specialist Disability Accommodation programme. SDA housing is purpose-built accommodation designed to support tenants with extreme functional impairment or very high support needs. To encourage economic participation in the programme, the federal government opened the opportunity for private investors to purchase approved SDA housing.

SDA property vs traditional property

Unlike a traditional investment property offered on the residential market, SDA properties are only able to be leased by NDIS participants in need of specialised housing. They are built across four SDA design categories and cater to being able to accommodate multiple tenants.

Due to the nature of SDA funding, each tenant is on a separate lease, meaning that investors have better continuity of rental income than a standard investment property.

High rental yields

NDIS properties are now renowned for their high rental yields. In fact, due to the SDA funding model, property investors who own specialist disability accommodation attract higher than average market rents.

SDA funding is designed to cover the building costs and maintenance of NDIS housing, and is accounted for in approved NDIS participants’ NDIS plans. SDA tenants are required to make a reasonable rent contribution, and in some cases, they are required to direct the full amount of government pensions (or a partial amount) towards the rent costs, also.

It is not unreasonable to expect a net yield (that is, after expenses) of between 10-20% pa for your NDIS investment property!

Considering the average rental yields for the standard residential property market didn’t come close to 10% at the end of 2022 , in some cases, SDA properties can attract a ROI of up to three times that of the standard property market.

average rental yields

Starting your investment journey in the National Disability Insurance Scheme

We don’t just recklessly chase ultra-high investment returns, we are passionate about achieving sustainable, long-term, high rental yield, while selectively choosing properties with capital growth potential that provide Australians with disability a forever home.

The real return of NDIS housing investment is the tremendous impact that it has on the community and those living with significant disability. The financial outcomes are simply the icing on the investment cake.

To learn more about how an NDIS SDA property could transform your financial future and the future of an Australian with disability, get in touch with our professional team.

FAQs

We answer two of the most commonly asked questions about buying SDA for investment.

Who can manage an SDA property?

The SDA provider is legally obligated to access a licensed SDA rental manager through a specialist property management firm to manage your SDA property.

Who receives SDA funding?

SDA funds are paid via SDA payments directly to the SDA provider, who then passes them onto the property owner.

Get in touch with our team for more information now.

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