If you’re contemplating investing in NDIS property as your next investment avenue, then undoubtedly, you’ve asked yourself how expensive an SDA home is to build. For many that feel drawn to ethical National Disability Insurance Scheme (NDIS) property investment, the Australian Government-backed rental guarantee is a major win – but of course, it pays to crunch the numbers.
We walk you through some of the factors that should be considered in gauging the cost of building an SDA home so that you can step into your NDIS loan with confidence.
How does an NDIS SDA property investment differ from standard investment properties?
Specialist Disability Accommodation (SDA) homes now look and feel very much like any standard residential property. However, strict design standards need to be adhered to for the home to be SDA compliant. Depending on which design category the home is, NDIS properties typically require additional land (either for mobility logistics or to provide distance from neighbours), wider doorways, modified room configurations and fit-outs (such as wheelchair accessible bench heights and bathroom aids), as well as a private bathroom for each bedroom in multiple-tenant dwellings.
In terms of property types, standalone homes, duplexes, and units can all be SDA properties – provided, of course, that they satisfy the design standard for whichever category of home they fall in.
The four design categories are:
These homes are designed to improve the liveability for those living with intellectual, sensory or cognitive impairment.
Fully Accessible homes are designed to incorporate a high level of physical access for Australians living with physical impairment.
For tenants who pose a risk to the community or experience physical behavioural issues, robust homes are designed to be resilient and withstand damage. Often these homes are placed in more isolated areas for the safety of the participant and the community.
High Physical Support
The high physical support design categories support people with a significant physical or mental impairment who have very high support needs.
What is the cost to build a Specialist Disability Accommodation home?
In the standard home market, no two residences cost the same to build. The same is true for SDA properties. According to the Australian Bureau of Statistics (ABS), in early 2020, the average cost of building a home was $1,393.55 per square metre [https://www.abs.gov.au/articles/characteristics-new-residential-dwellings-15-year-summary]
As a general rule of thumb, SDA dwellings do cost more to build than standard properties. Of course, there are the usual aspects of building a property that is true for any home build:
- Site considerations
- Desired timeframe
To ensure compliance with the SDA Design Standard, there are additional requirements to that of a standard home build which accounts for the additional cost, such as the one’s previously mentioned, including:
- Larger than usual block size
- Larger than usual floor plans for ease of mobility
- More robust materials to withstand wheelchairs
- Home automation requirements
- Custom fit-out and configuration
- Additional rooms such as bathrooms for each bedroom requiring more materials, labour and potentially specialised equipment
- Longer build time due to specialised design
Is investing in NDIS housing worth the money?
Thankfully, for the slightly more expensive build costs, the benefits of an NDIS investment property are revolutionary. Not only will your investment help to provide a forever home with an Australian living with a disability, but you will also receive benefits that are unmatched in the private property investment market.
- Twenty-year legibility for SDA payments. Federal Government-backed rental return typically between 10-15% gross per annum, thanks to SDA funding.
- Rental income is not determined by the market.
- Average lease time of 12-24 months, however usually properties are ‘forever homes’ for the tenants. Some SDA providers seek out tenants for long term leases. Be sure to ask your SDA provider about their average lease time.
- High occupancy rate given the demand for NDIS SDA properties seriously outweighs the supply.
At NDIS Loan experts, we are leaders in lending for SDA housing investment. Contact us today to understand how your SDA investment property build cost can be funded!