If you’re searching for investments to fund your retirement, an NDIS property investment may be worth considering.
What is an NDIS Property?
A National Disability Insurance Scheme (NDIS) property is a purpose-built or modified home designed to meet the needs of individuals eligible for Specialist Disability Accommodation (SDA) under the NDIS.
These properties come with various features and modifications to make life easier and more comfortable for people with disability.
Are NDIS properties a good option for retirement investing?
Undersupply of properties and demand expected to boom by 2030
The growing need for SDA homes and current undersupply means NDIS investments present a unique opportunity with a reliable source of rental income.
According to recent figures, the demand for SDA homes is forecast to skyrocket from around 28,000 to over 50,000 by 2030.
However, as of December 2021, only 4,624 new build dwellings are enrolled or in the pipeline, falling significantly short of the 28,000 homes required by 2030. This gap is a promising opportunity for retirees considering an NDIS property investment.
Higher rental income compared to traditional properties
Government funding and high demand mean SDA investors secure above-market rental income, potentially reaching yields of between 10%-18% per annum. A positively geared NDIS property could help supplement retirement income.
That said, the income from your NDIS investments will vary depending on a few factors, including the type of property you own, where it’s located, the number of tenants and the design category it falls into.
The returns on NDIS investment properties are not linked to the market. This means compared to traditional properties, these higher rental yields are less prone to the fluctuations that come with the housing market volatility.
To bridge the significant shortfall in SDA housing, the Australian government is offering a range of incentives to investors.
The NDIS, backed by the federal government, enjoys the unique advantage of bipartisan support. This means the program remains in place regardless of the political party in power.
This continuous support gives SDA property investors a sense of security, as their tenant income and incentivised SDA payments remain a high likelihood regardless of the political party in power.
Make a positive social impact on local communities
Investing in an NDIS property contributes positively to the community by providing much-needed and quality housing for those with disability.
The tenant’s quality of life is improved, which can promote a more independent lifestyle and social inclusion. A big problem faced by people with disability, especially younger people, is that they often have to live in retirement homes or hospitals that can cater to their needs without more SDA options.
We all want to live in a home where we feel comfortable and secure; specialist housing meets the unique needs of the tenants so they can enjoy their home environment too. It’s a great way to make a positive social impact in your retirement years.
Capital growth opportunity
One of the big benefits of SDA housing is the potential for capital growth. The high demand for SDA homes, stemming from their limited availability and specialised features, paves the way for substantial price appreciation over time, especially in regions facing a shortage of suitable housing options.
SDA properties are often located in regional areas that may not appeal to traditional investors, which can drive up prices.
Diversify your investment portfolio
The unique characteristics of SDA properties can diversify your investment portfolio, which is particularly important for retirees.
By exposing you to a niche market with strong demand and limited supply, SDA properties can help to mitigate risks associated with other asset classes and achieve a more balanced portfolio.
Diversification is a critical factor in creating a successful retirement strategy, and SDA properties may be included as part of that strategy.
Reach out to our team to discuss NDIS investments in more detail and if an SDA property is the right option for your retirement.