The National Disability Insurance Scheme (NDIS) is not only changing lives for those with disability, but it’s also creating an exciting investment opportunity for those looking to diversify their property investment portfolios. NDIS properties are specially designed for people with disability, providing accessible living spaces that cater to a growing market. However, like any investment, they come with considerations. Here are some considerations to help you determine if NDIS property investment is right for you.
Cash flow positive property investment
One of the considerations of NDIS property investment is the potential for positive cash flow. The rental income from NDIS properties tends to be higher than that of traditional investment properties. This is because tenants receive funding through the NDIS specifically to help pay for specialist disability accommodation (SDA). The rental income is made up of a reasonable rent contribution, SDA payments and Commonwealth rental assistance.
It’s important to speak to an accountant or financial adviser to determine if the high cash flow associated with this type of property investment is right for you.
High deposit requirements
While the cash flow from NDIS properties can be high, it’s important to understand that the initial costs can be higher than standard property investments. NDIS properties must meet high standards of design and accessibility, requiring specialised architects and builders. These specialised features all contribute to a higher upfront investment.
This means that securing finance for an NDIS property generally involves a larger deposit (usually 20% or higher) which might require more significant capital to get started. As a result, potential investors need to be prepared for higher entry costs compared to traditional property investments.
While a higher deposit is generally required, this does not need to be cash. If you have sufficient equity in existing properties, that may be all that’s required.
Social impact
An often-overlooked benefit of investing in NDIS properties is the social impact. By choosing to invest in this sector, you’re contributing to a greater cause. NDIS properties are designed to improve the quality of life for individuals with disability, providing them with a comfortable, accessible living space.
For property investors looking to make a positive difference in society, NDIS property investment is a compelling option.
Specialised knowledge and due diligence
Investing in NDIS properties requires understanding the NDIS framework, funding models, and building regulations. Conducting thorough due diligence and ensuring that the property meets all necessary criteria to qualify for NDIS funding is essential. You’ll need to understand the requirements of the NDIS participant’s needs and the associated care support services that will be required.
Before jumping in, take the time to research the market thoroughly. Speak to professionals with expertise in NDIS property. Ensure you understand the regulations and your responsibilities as an NDIS property investor.
At NDIS Loan Experts, we can help guide you through the compliance requirements.
Ongoing maintenance and compliance
Due to the high standards and specialised nature of NDIS properties, ongoing maintenance can be more intensive than regular investment properties. It’s essential to ensure that your property complies with NDIS requirements, which may involve regular inspections and updates to meet changing regulations or participant needs. Specialised SDA property managers can be contracted to ensure that maintenance and compliance are kept up to date. A reliable property management team that understands the unique requirements of NDIS tenants can ensure that your property remains in good condition.
NDIS property investment offers a unique opportunity for investors seeking positive cash flow and a chance to make a meaningful social impact. However, there’s a lot to consider before jumping in. High initial costs, specialised knowledge, and long-term commitment are all factors that need to be considered.
If you have the capital to meet the deposit requirements, the willingness to learn about the NDIS sector, and a desire to make a positive impact, NDIS property investment might be worth considering
If you’d like to learn more about the NDIS investment property process, please reach out to us.
