Investing in National Disability Insurance Scheme (NDIS) properties presents a unique opportunity to generate rental returns while contributing to social impact. Navigating this specialised market requires careful planning and due diligence. Here’s a guide to help you identify the right NDIS property for investment.
Understand the NDIS Framework
The NDIS supports people with disability by providing funding for Specialist Disability Accommodation (SDA). These properties must meet specific design standards to accommodate participants’ needs.
The different design standards include Improved Livability, Robut, Fully Accessible, and High Physical Support. Each SDA design category is designed and built to cater for slightly different needs.
SDAs exist to help provide suitable housing for people with disability. Government funding is provided in the form of Commonwealth rent assistance and SDA payments, while the participant pays a reasonable rent contribution. This ensures investors are incentivised to supply suitable housing, while participants receive subsidised rental properties to live in.
A clear understanding of the framework ensures you align your investment with market demands.
Research Market Demand
The demand for NDIS properties varies significantly across regions. Conduct thorough research on:
- Local demographics: Areas with a higher population of NDIS participants are more likely to have stronger demand for SDA properties.
- Vacancy rates: Avoid oversaturated markets and seek areas with unmet demand.
- Proximity to amenities: Accessibility to healthcare facilities, public transport, and community centers is crucial.
Leverage tools like government reports, SDA demand maps, and local council data to make informed decisions.
Choose the Right SDA Design Category
NDIS participants have diverse needs, so selecting the appropriate SDA design category is essential.
Understand Participant Demand in Your Target Area
The demand for specific SDA categories varies geographically. Research the needs of participants in your chosen location to align your property investment with market gaps. For instance:
Evaluate Rental Returns by Category
High Physical Support properties typically generate the highest rental returns due to the funding allocated to participants requiring specialised housing. This is determined by the SDA pricing model. Robust with a breakout room also provides a higher level of funding. Compare potential returns across categories to determine which aligns with your investment goals.
Construction and Compliance Costs
While High Physical Support and Robust properties come with higher SDA payments, they also generally come with higher construction and maintenance costs. Budget carefully and factor in SDA compliance requirements to avoid unexpected expenses.
Tenant Longevity and Lease Terms
Certain categories, like Fully Accessible and High Physical Support, tend to attract long-term tenants due to the specialised nature of the housing. Robust dwellings may experience shorter lease durations due to the unique needs of the participant demographic.
Partner with Experienced Specialists
Working with an SDA specialist architect or builder is crucial to ensure your property meets design and compliance standards. An experienced professional will:
- Help you optimise your property layout to enhance tenant appeal.
- Ensure compliance with NDIS guidelines to qualify for SDA funding.
- Advise on cost-effective design features that boost rental potential.
We have a network of trusted SDA professionals that we can put you in touch with.
Consider the Financial Implications
NDIS properties offer attractive rental yields but often come with higher upfront costs due to design requirements. Evaluate:
- Construction costs: Budget for the additional expenses associated with SDA compliance.
- Government incentives: SDA properties are eligible for SDA payments, which can supplement the rental income.
- Ongoing management fees: Factor in fees charged by SDA providers or property managers.
At NDIS Loan Experts, we can help you determine and improve your borrowing capacity so you have a solid understanding of the deposit required and construction costs of the property. NDIS property investments are highly specialised, and we can help you through the process from end to end, ensuring you get the right support with financing, designing, and building the property, all the way through to supporting you with tenanting the property.
If you’re ready to explore NDIS property investments, please reach out to us today.
