Investing in Specialist Disability Accommodation (SDA) property has a vast and lasting impact on the community and lives of people with disability. The benefits for National Disability Insurance Scheme (NDIS) participants who get to live in a home that fully caters to their needs is priceless. But there are other benefits that we can put a price on. We explore some of the financial benefits that come with an NDIS property investment.
Risk mitigated property investment
Because the federal government pays a significant portion of the rent through SDA funding, the investment risk is significantly reduced. Government investments are considered the safest types, so SDA housing being backed by the government comes close to being a risk-free investment.
The government is determined to place NDIS participants into appropriate housing, which is why they’ve committed to fund SDA homes for 20 years. For investors, this means that SDA payments are secured by the Australian Government for 20 years, with the possibility of this extending beyond that timeframe.
Using conservative figures for rental yields, it’s not unreasonable to expect you’d earn high rental income in excess of $100,000 per year.
Imagine what you could do with an extra $100,000 every single year! And even better, the rent is linked to the Consumer Price Index (CPI), so your rental income will rise each year in line with inflation.
Investing in NDIS properties could help you:
- Pay off your home loan. Forget paying off your mortgage over 30 years! With an NDIS investment property fetching a huge return each year, you could have your loan paid off in just a few short years.
- Save for retirement. By purchasing NDIS properties inside an SMSF, you can take advantage of concessional tax rates and accumulate money ready to fund your retirement. Or, for anyone looking to retire early, purchasing an SDA investment property outside of super could provide enough cash flow to fund your lifestyle without needing to meet a condition of release to access the money like you would if the property was inside super.
- Set your family up for a financially free future. Most people dream of financial freedom. This unique investment opportunity may offer the tools you need to reach financial freedom for not only yourself but for future generations to come.
Low risk of vacancy
When investing in property, the risk of vacancy is a very real reality many property owners face. Having your property sit vacant while you’re repaying the mortgage, paying insurance premiums and keeping up with rates can be crippling for investors.
There is a huge demand for specialised disability housing and a drastic undersupply, so the vacancy risk is very low. If a tenant moves out for whatever reason, chances are someone else will be moving in soon after. Of course, vacancy risk still exists for NDIS property investors, so the government have sought to mitigate this risk by providing rental guarantees. If NDIS properties are left without a tenant, the government will cover the rent for up to 60 days for houses with 2 or 3 rooms and up to 90 days for NDIS homes with 4 or 5 rooms. This is a benefit you won’t find by investing in regular property.
The risk of vacancy is further reduced due to the fact that people with disability are generally long-term tenants. Once they find suitable housing that suits their needs and improves their quality of life, they generally want to stay for as long as possible.
The benefits of investing in NDIS property are widespread and long-lasting for not only the investor, but for NDIS participants, families and carers. If you’re interested in learning more about SDA investment properties, don’t hesitate to reach out to us.