Why should you invest in SDA property?

By Uwe Jacobs

Investors seeking high returns know that a National Disability Insurance Scheme (NDIS) Specialist Disability Accommodation (SDA) investment property can offer great opportunities. If you’re curious about the NDIS and don’t know where to begin, keep reading.

NDIS SDA investments are not quite as simple to understand as buying a house and land package, but they have the potential to generate huge profits while aiding those in need. So, what is the NDIS? How does it work?

In short, the NDIS is an initiative designed to give lifelong supported independent living to individuals with disabilities while also supporting their relatives and caregivers. It was established to help improve the quality of life for these individuals by providing choice and control.

A fundamental piece of the NDIS puzzle is SDA, which stands for Specialist Disability Accommodation; this type of housing caters to people with extreme disabilities who require high levels of support.

To qualify for SDA funding from the NDIS, participants must meet the eligibility criteria.

Ultimately, SDA investment property provides ongoing, high-quality, sustainable housing solutions to those with extraordinary functional needs.

Why invest?

Investing in Specialist Disability Accommodation (SDA) yields numerous benefits. Not only can you generate very handsome returns, but it also serves a greater goal of improving the lives of persons with disability by providing them with comfortable living spaces. The scheme’s exclusive mission is to supply people with special needs with housing that accommodates their specific needs.

With an SDA, you can invest in housing such as single-family homes, villas, group homes, apartments, legacy stock, townhouses, or duplexes. As an investor, you own the approved SDA home and lease it, via an SDA provider, to eligible NDIS participants. It’s important to remember that the National Disability Insurance Scheme (NDIS) will pay funds for an SDA dwelling only if the provider is officially registered and meets all necessary regulatory requirements.

With much higher net rental yields Australian real estate investors are increasingly drawn to NDIS property investments for a variety of reasons, mainly due to the opportunity to acquire significant returns without exposure to excessive risk. 

To make sure they satisfy all qualification requirements during planning and building phases, these investors should partner with an NDIS Registered Provider, who is familiar with this kind of real estate and understands not only the Liveable Housing Australia (LHA) specifications for user-friendly design, but moreover is experienced in the application of AS1428.1 and has expertise in the application of the NDIS Specialist Disability Accommodation Design Standard.

Longer lease

SDA dwellings have another major perk in that most tenants prefer to lease for longer periods than in traditional houses.

This gives you stability as an investor and much comfort knowing your property will be billable and occupied for longer periods.

As an investor, your real estate portfolio will do better if you Invest in NDIS SDA housing classifications, where the demand is highest and the leases are significantly longer. This is especially true if you follow the Property Friends formula of position-advantaged choice locations and adopt a participant centred focus.

Most experienced investors use this strategy to maximise returns on investment: to make the highest possible returns, ensure that your tenants are in for a long-term lease by taking a person centred focus and approach.

Before and during the process of renting out your property, make certain that you have a qualified SDA provider. The provider will manage your property in an efficient and compliant manner. This is obligatory by law and the only legal way to provide SDA’s.

The primary goal of an investor is to ‘set and forget’ by having someone professionally manage your properties. As you can see, you don’t have much work to do as a good SDA Provider will handle everything for you.

Risk mitigation (NDIS is government-owned)

The federal government is an integral part of the National Disability Insurance Scheme, allocating a designated budget for providing housing and assistance to those with disabilities. The legislation has been established, creating a legal and secure safety net for those affected.

If done through a well-structured and risk mitigated system, SDA property investments come with fewer risks, since they can be purpose designed and built compared to other forms of real estate, due to being owned and managed by private or corporate investors. 

Furthermore, with 20-year government funding arrangements, there’s a greater chance for better returns, especially due to tenants/participants usually seeking to stay for the long-term., happy to enter into long term agreements.

Effectively both income streams of an SDA home, being the SDA payment from the NDIS and the Maximum Reasonable Rental Contribution from the participant/tenant, are government- backed incomes – hence recession proof!

To receive approval from the government, prospective investors must align themselves with SDA approved providers who oversee and maintain the properties in question. This mitigates risk and increases potential gains.

Moreover, to adhere to NDIS regulations, dwellings must fulfil specific criteria and regulations. This can be achieved by hiring an approved SDA Property Manager to liaise with care providers, whose responsibility it is to manage clients with disabilities.

If these steps are followed correctly, property owners can benefit greatly as the people in the industry are aware of potential dwellings even before completion.

Before you can use a property for SDA tenants, it must adhere to a stringent set of standards; so securing financing can be more challenging than with typical housing.

Investing in SDA properties can be a great way to maximise gains and build wealth. With the right research, savvy investors have the potential to make impressive returns on their investments that could generate steady income.

However, those interested in this type of investment should be aware of the risks associated with it, such as fluctuating rental rates and unforeseen costs. But, with the proper knowledge and care, investing in SDA property can be an exciting and rewarding experience that has the potential to yield significant financial rewards.

Ready to get strategic?

At Property Friends, we’re not just about bricks and mortar. We’re about dreams, ambitions, and building strong financial foundations. We understand that every investor is unique, which is why our approach is tailored specifically for YOU.

Don’t leave your financial future to chance.

Dive into a FREE, no-obligation discovery call where we’ll learn about your goals, your dreams, and craft a personalized property investment strategy that aligns with YOUR vision.

Click below and embark on a journey to secure your financial future. Let’s shape a strategy that truly resonates with your individual aspirations. 

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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

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