First things first. Just what is the NDIS?
The NDIS, or National Disability Insurance Scheme, is a scheme introduced by the Australian government to provide support to people with disabilities, their families, and their carers.
Jointly governed and funded by the Federal and State/Territory Governments, the NDIS was launched in mid-2013 as a trial phase known as the NDIS Launch. The scheme began in 2016 and is now available in all states and territories.
The NDIS will provide more than $22 billion worth of funding between 2022-2027 on an annual basis to approximately half a million Australians who are either permanently or significantly disabled. There are currently 4.3 million Australians with a disability. For many, the $110 billion worth of government funding will be received by many as their first-ever government payment.
Due to the 4.3 million Australians suffering from a disability, the government has identified a severe lack of suitable properties available. More worrying is that this applies to a large amount of younger people with permanent disabilities meaning this will be a long-term requirement for appropriate housing.
To counteract the shortfall, the Federal Government has committed to paying the rental costs of said people above for the next 20 years with significantly higher rental yields, upwards of 10%, expected to provide over $700 million annually.
Given the significantly higher rental yields, this will provide investors with the confidence required to invest in the scheme, generating a crucial uplift in the number of SDA homes.
One of the purposes of the scheme is to provide Specialist Disability Accommodation (SDA) which has been designed for disabled people with high support needs and functional impairment that is deemed to be extreme. SDA housing provides residents with features that allow them to live more independently and make it easier for support to be safely delivered and more efficiently. SDA aims to improve, maintain or prevent one's functional capacity from worsening, reduce future support needs and create better connections with their family, community, health services, education, and, if possible, employment.
If you are searching for a property investment that makes you feel just as good as the return it promises, this may be a great investment opportunity. You are not just providing a comfortable home to accommodate someone with a disability, there is also a significantly higher-than-average market rent with yields of more than 10% and in some cases up to 15% when dwellings are fully let with approved NDIS SDA participants.
The NDIS will examine four accommodation categories when deciding whether to fund the property. They are:
To get a loan approved for an NDIS SDA accommodation, you need to:
The NDIA expects SDA providers to develop and utilise various methods to advertise their SDA vacancies. Many will be market-specific. Some common methods of advertising a vacancy will include:
Some large SDA providers may pool some payments to fund a vacancy management team for their SDA portfolio. These teams may operate like more centralised approaches delivered by state and territory governments under previous systems. Some SDA providers may engage a third party to manage their vacancies and tenancies, as is most often in the mainstream housing market.
The Federal Government supports the funding and provides the investor a guaranteed and secure income stream.
Under the NDIS scheme, you can construct apartments, villas, duplexes or townhouses, stand-alone houses, and group homes.
The above can be considered a group home as long as many residents live there.
The property's design restraints must align with the following: