What you need to know before Investing in Specialist Disability Accommodation

March 25, 2022

 

Do you want to make a real difference in the lives of people with disabilities, while also seeing a great return on your investment? Specialist Disability Accommodation (SDA) may be the perfect opportunity for you!

SDA homes for National Disability Insurance Scheme (NDIS) participants are in chronic short supply across Australia and investors who are willing to research and understand the intricacies of this type of property investment can receive fantastic returns while having a positive impact on People with Disability.

Before considering investing in an SDA property, there are several things you should know. SDA properties are dwellings approved to house SDA funded participants under the NDIS, and there is currently a significant undersupply of them across the country. This presents a great opportunity for investors, as properties in this sector can generate returns of up to 15% per annum.

However, the process of investing in SDA-approved properties can be complex, so it’s important to seek expert advice before taking the plunge. We are commonly asked how SDA works from an investor’s perspective, so we’d like to outline a few key points to understand before making an investment in this much-needed housing for Australians with a disability.

 

What is SDA?

SDA housing is designed specifically for people with extreme functional impairment or very high support needs who are NDIS participants funded for Specialist Disability Accommodation. This means that SDA properties offer improved livability features, such as wheelchair accessibility, smart automation and other accessible elements.

 

How do you invest in an SDA property?

Being a relatively new niche investment market, many people are not sure how to start the investment process in SDA.

Firstly, you can purchase an existing property and adapt it to meet SDA housing requirements, but this is expensive and complex, given the NDIA rules for existing dwellings being converted to SDA. Alternatively, you could seek out purpose-built SDA developments, which are becoming increasingly popular.

The majority of new builds available for investment are House & Land packages, or apartments and villas.

Here at NDIS PROPERTY AUSTRALIA, we have a range of House & Land packages throughout Queensland, Melbourne and Perth as well as development sites for villas and/or units in regional NSW.

To be eligible for SDA funding, the property must meet the design requirements set out by the National Disability Insurance Agency (NDIA). These requirements cover things like the size of bedrooms and bathrooms, as well as wider doorways and hallways to accommodate wheelchairs.

The property must also have what’s known as ‘universal design’ features, which make it easier for people with a range of disabilities to live there. For example, this might include grab rails in bathrooms, level entryways and automatic doors, depending on the SDA category.

For more details about SDA categories, visit our SDA page.

 

How do you find a tenant?

If you’re thinking of investing in Specialist Disability Accommodation (SDA), it’s important to understand how the NDIS works and how you can connect with tenants. The NDIS operates on a broad market approach, which means that participants are expected to find and apply for appropriate advertised vacancies themselves. This can be done in two ways – contacting providers directly or using online sites such as Housing Hub or Nest.

From the investors point of view, you will want to engage an SDA provider who is connected to a number of SIL providers who have the participants requiring housing, either having been approved for SDA funding already, or who are currently going through the funding application process.

Here at NDIS PROPERTY AUSTRALIA, we are partnered with ADAPT HOUSING, a Queensland and New South Wales based specialist disability housing provider, offering solutions on a national scale. ADAPT has established a strong presence in the disability sector, working closely on a national level with care providers and support services. Currently ADAPT is working with over 40 support service providers to help maximise tenancy procurement and peace of mind accommodation for participants. If you have an SDA house that needs tenanting, we recommend Adapt Housing.

 

Who pays the rent?

Are you thinking of investing in Specialist Disability Accommodation (SDA)? If so, it’s important to understand the payment structure and how it affects your investment.

The NDIS provides SDA payments, which are paid to the SDA provider once an SDA funded NDIS participant is resident in the property. The participant also pays a “reasonable rent contribution” of 25 per cent of their base disability support pension. So, once you have tenants in your property, rent is basically guaranteed, which is important when it comes to investment returns.

SDA rental properties are typically not subject to the same market forces as regular residential rental properties. SDA funded NDIS participants are looking for their forever home and if the dwelling meets their requirements and suits their needs, they are not likely to move out. This makes an SDA property a more stable investment option.