In the realm of property investment, Specialist Disability Accommodation (SDA) or NDIS properties have emerged as a significant player. While the potential for significant returns can be enticing, these investments involve unique nuances and require substantial due diligence. This article aims to provide you with an overview of the considerations necessary when investing in this sector, focusing particularly on the special needs of the National Disability Insurance Scheme (NDIS) participants.
Understand the NDIS Framework
The first step in this investment journey is understanding the NDIS framework, which is an Australian scheme aiming to support people with disabilities. NDIS provides financial assistance for various services, including SDA properties, to accommodate individuals with severe physical and cognitive disabilities.
Conducting Due Diligence
Investing in SDA properties is not as straightforward as investing in traditional real estate, and your due diligence should account for this. Here are several considerations:
1. Property Compliance:
SDA properties must meet strict regulations to ensure the safety and comfort of the inhabitants. Review the NDIS’s SDA Design Standard, which outlines critical requirements for all new builds, refurbishments, and substantial upgrades.
2. Market Demand:
A crucial aspect of due diligence is understanding the demand. NDIS provides a yearly update on the demand and supply for SDA, which is a good starting point. Further, it’s worth delving into specifics, like the demand for different types of SDA properties in various geographical areas.
3. Operator Experience:
Working with an experienced operator can make a world of difference. They will have a sound understanding of the NDIS, the SDA rules, and how to effectively manage an SDA property. Investigate their track record, including the quality of properties they manage and their relationships with tenants and the NDIS.
Special Considerations for NDIS Property Investments
1. Tenant Needs:
This is arguably the most crucial aspect of an SDA property investment. Each tenant will have specific needs, which means that each property needs to be built or adapted to suit those needs. This could range from accessibility requirements to specific equipment or technology.
2. Long-term Investment:
SDA properties are typically long-term investments. The NDIS encourages long-term leases, potentially for 20 years, and many participants prefer the stability that long-term arrangements provide.
3. Partnerships and Community:
Investing in an SDA property goes beyond the building itself. It’s about creating a home for people who often struggle to find suitable accommodation. It’s also about building relationships with local services and the community, which can help make the property more attractive to potential tenants and enhance their quality of life.
Investing in NDIS properties can offer a combination of strong returns and the reward of making a significant difference in people’s lives. However, these investments demand a deep understanding of the NDIS framework, robust due diligence, and a commitment to meeting the unique needs of each tenant. By taking the time to understand these factors, you can position yourself for success in this unique and rewarding sector of property investment.
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Property Friends is a specialist Property Investment Strategist that provides solutions for people aspiring to financial independence, choices in retirement, or leaving a legacy. www.propertyfriends.com.au (03) 9758 5331