NDIS Loan

NDIS participant supports (also referred to as services for participants) are co-funded through a pooled approach by the Australian Government and state and territory governments.

To help meet the costs of the NDIS, the Medicare levy was increased from 1.5% to 2% of taxable income from 1 July 2014.

It simply means buying an Specialist Disability Accommodation (SDA) property. SDA property is also commonly called NDIS property, because SDA property rental payment is funded under NDIS (National Disability Insurance Scheme).

Anyone can buy/invest in SDA, including individuals, SMSFs, Trusts and corporate entities.

No training or qualification or licence is required to buy an SDA property. Consider an SDA property like any other residential property and to buy an SDA property, all you need is your own money or ability to get a loan from a lender.

Specialist Disability Accommodation (SDA) property is a custom designed and built house for disabled people with extreme functional impairment or very high support needs. SDA house is also commonly called NDIS property, as its rental payment is funded under NDIS scheme.

In other works, SDA is an accommodation for people who require specialist housing solutions, including to assist with the delivery of supports that cater for their extreme functional impairment or very high support needs.

SDA does not refer to the support services, but the homes in which these are delivered.

SDA houses are built either under class 1 or class 3 of NCC (National Construction Code) depending on states and territories local requirements. In addition, it needs to comply with NDIS Specialist Disability Accommodation Design Standard Edition 1.1 Issue Date 25th October 2019.

The short answer is yes you can but in reality, you must not try this. Due to strict compliance requirements that are needed to be followed as per SDA design guideline 2019, there is a very high chance that you may not pass all requirement making your renovated house ineligible for SDA certification and funding.

Even if you could achieve compliance, it would be a very expensive exercise in any case. It would be cheaper to build a new SDA house from scratch.

The best example is if someone need to buy a BMW car, they will simply buy a BMW car, rather trying to modify a KIA car to make a BMW. Hope you got the point.

Yes, this would be possible subject to local authority requirements and approval.

Most SDA properties are Land & House package. You should allow 12-15 months for completion. 3-5 months for approval and 7-9 months for construction.

First you will need to settle land and then once approval is received, construction will commence. Progressive payment will be required to be made as building construction progress.

As soon as land settle, your mortgage will start, and it will gradually increase as building construction progresses and progressive payment to your builder is made. You will be funding your entire construction without receiving any rent; therefore, we always suggest having $40K – $50K extra for construction payment, if you are cash tight.

At times, we have access to newly built or tenanted SDA properties available. Please reach out to our team.

Assuming you have bought a land and house package SDA property, you will be required to go through various stages before you can get rental income, and these are:

• Purchase (time 0)
• Land settlement (2-3 months)
• Design Approval (3 to 5 months)
• Construction Period (7 to 9 months)
• SDA certification and Occupancy Permit
• SDA enrolment (2 to 6 weeks)
• Tenancy (this is when you will start to get rent)

No, you will not receive any rent during construction therefore we always suggest having $40K – $50K extra for construction payment, if you are cash tight.

SDA property looks like any other residential property from outside, but it has many differences internally such as:

• Wider Door
• Hoist provision in each room
• Wider Kitchen Area
• Adjustable Kitchen Benchtop
• Bigger Bathroom with no shower Hub
• Anti –slippery floor
• Automatic lights
• Automatic blinds & curtains
• Backup power
• Fire Protection (fire sprinkler)
• OOA (Carer room) and so on

• A property investor – like you who owns the SDA property and receives passive rental income
• Participants – Eligible disable people/tenet who will lease/occupy SDA house
• SDA provider – A property manager for an SDA property, who will find tenants/participants
• NDIA – The National Disability Insurance Agency (NDIA) to assess and pay rental income to SDA provider on behalf of eligible tenants/participants
• SIL provider – A Supported Independent Living (SIL) provider help participants with and/or supervision of daily tasks to develop the skills of an individual to live as independently as possible.

A Specialist Disability Accommodation (SDA) provider is a property manager for an SDA property. They go through a stringent application process & regular auditing from the NDIS to maintain their registration as an SDA provider.

An SDA provider will have a head lease with the owner of the home, a collaboration agreement with the SIL provider and a tenancy agreement with each participant. They can submit service requests to the NDIS to access the SDA funds for participant living in an SDA house. They also provide the following:

• Enrol SDA property
• Vacancy advertising
• Regular inspections & Tenant turnover management
• Ensure compliance of the SIL provider including fire safety, cleanliness, and tenant
• Adhere to strict NDIS recording and reporting guidelines and
• Rent collection and coordination from various
• Responding to repair and maintenance requests and arranging tradespeople
• Creating and maintaining lease documents, head leases and collaboration agreements.

Participants and SIL staff will be responsible for any damages that have been caused wilfully.

A Supported Independent Living (SIL) provider supervises and supports people who need significant help throughout the day, 7 days a week, including through the night. They will work to help residents to live as independently as possible. There is generally only one SIL provider looking after multiple residents in a home, and they will have a collaboration agreement with the SDA provider to continue care on and ongoing basis.

ROBUST (R)
Housing designed with reasonable provision to be very resilient, reducing the likelihood of property damage and reducing the risk to the participant and the community.

IMPROVED LIVEABILITY (IL)
Housing designed to improve ‘Liveability’ by incorporating a reasonable level of physical access and enhanced provision for people with intellectual or cognitive impairment.

FULLY ACCESSIBLE (FA)
Housing that has been designed to incorporate a high level of physical access provision for people with significant physical impairment.

HIGH PHYSICAL SUPPORT (HPS)
Housing designed to incorporate a high level of physical access provision for people with significant physical impairment and requiring very high levels of support.

Yes, you can design and built your SDA house as a hybrid. Once house construction is complete and Occupancy certificate is granted, it will either need to be enrolled as a Robust, or High Physical Support house, it cannot be both. You can choose how you want to advertise and enrol your property.

If you enrol your SDA property as High Physical Support, then you cannot have Robust tenants and vice versa.

As with any tenants in a rental property, they have the right to their privacy. Their NDIS plan, specifics of their condition, behaviours and required care are strictly confidential.

Rental returns on an SDA house are made of two components and from one SDA house you can generate $150K to $250K gross rental income per year.

• SDA payment
• Maximum Reasonable Rent Contribution (MRRC)

For up-to-date SDA figures reference the following directly from the NDIS:

https://www.ndis.gov.au/providers/housing-and-living-supports-and-services/specialist-%20disability-accommodation/sda-pricing-and-payments

Firstly, please take note of the word ‘Maximum’ is the name. The current rate of $12,018 per participant per annum is the maximum amount that you can receive. This is made up of 25% of the participants Disability Support Pension (DSP), plus 100% of their Commonwealth Rental Assistance. In some circumstances participants are not receiving both, or any of these payments so the rent is negotiated with them, or their guardian. We have also seen circumstances where participants have medication bills outside of the NDIS plan that they are needing to pay for which doesn’t allow for the full rental amount to be paid. On average SIL providers take 50% of their DSP for food, cleaning, etc., which doesn’t leave a lot.

In most circumstances, yes, but check your lease agreement with your SDA provider. There are some SDA providers who do not pass this onto owners for the following reasons:

• Providing advertising campaigns that offer tenants 6 or 12 months no rent (MRRC).
• Providing advertising campaigns that offer 1 month per annum cashback if paid on
• Providing improvement items to the house / E.g., new bedding, towels, TV in bedroom, BBǪ and outdoor furniture etc.
• Buying birthday and Christmas gifts for
• Allowing tenants to reduce, or not pay at all when their situation doesn’t allow it.

Ensure to ask your SDA provider if they pass this on when you meet with them.

From one SDA property, depending on location and SDA type, you can generate $150K to $250K gross rental income per year. Gross rental yield can be up to 30%. This is in addition to long term capital growth. These two collectively could be life changing for your own life. Keep in mind you are also making a positive impact on other disabled people life. So, this is win-win for everyone and very socially responsible investing.

Net income before tax is generally around 45%-55% of gross rental income, after deduction of mortgage repayment and all other typical expenses. Typical expenses are:

• Property management fee: 10-15%pa
• Council rate notice $3500
• Building Insurance: $2500
• Repair & maintenance: $2000
• Utilities bills: $6000
• Mortgage repayment: will depend on loan amount

Yes, without a doubt as you are making a positive impact on other disabled people life. So, this is win-win for everyone and very socially responsible and ethical investing.

No, it is not same and rental income depends on so many factors ush as

• Location of your property
• SDA dwelling type
• Whether your SDA has a carer room (OOA) or Rent is higher if there is an OOA
• Whether your SDA has fire sprinklers or Rent is higher if there is fire sprinklers system
• No of tenants occupying your Higher the number of tenants, higher will rent
• Whether your SDA has a breakout room (for robust) or Rent is higher if there is a breakout room.

Net income before tax is generally around 55% of gross rental income, after deduction of mortgage repayment. Typical expenses are:

• Property management fee: 10-15%pa
• Council rate notice $3500
• Building Insurance: $2500
• Repair & maintenance: $2000
• Utilities bills: $6000
• Mortgage repayment: will depend on loan amount

Net income before tax is generally around 45%-55% of gross rental income, after deduction of mortgage repayment and all other typical expenses. Typical expenses are:

• Property management fee: 10-15%pa
• Council rate notice $3500
• Building Insurance: $2500
• Repair & maintenance: $2000
• Utilities bills: $6000
• Mortgage repayment: will depend on loan amount

Say as SDA property generating $200K gross rental income p-er year, net income before tax will be generally around $90K-$110K.

On-site Overnight Assistance (OOA) is simply a carer room, where a support worker will reside 24 hours (3 workers 8 hours rotating shift) to support and look after disabled people living in an SDA house.

No, it is not mandatory, and it is optional. There are mixed opinions about having fire sprinklers and the industry is divided with some arguing it must be made compulsory, whilst others saying it is a waste.

So, it is your choice for now. Rent is higher, if there is fire sprinklers system, but also comes with annual maintenance cost of $5000- $10,000, which takes away rental increase. Also depending on property location fire sprinkler installation cost can range from $35,000 to $65,000.

Once SDA final as built certificate is issued, then it is valid for 7 years. This means any future changes are not required to be implemented for next 7 years from the date of the issue of SDA final as built certificate. Upon expiry of 7 years period, future changes will be required to be implemented.

The same concept applies for any other changes.

No. Only a registered NDIS provider can manage an NDIA-enrolled property.

You do not get paid directly by NDIA, rather you will get paid by your SDA provider on a monthly or quarterly basis as per your lease agreement with them. Once your property is occupied, your SDA provider will make a claim to NDIA for SDA payment. Once funds are received, they will deduct their management fee, prior to depositing money into your nominated account.

NDIA will still pay for 60 or 90 days depending on your SDA property and your SDA provider will start looking for another suitable replacement tenant. You will not receive any income if a replacement tenant is not secured within 60 or 90 days.

We as well as research have shown that people with disability finds a home, they are happy with, they do not ever want to move. This means many participants want to stay for life when they are in appropriate accommodation.

Thy do not have many of external or internal factors like need for a good school, higher income job forcing them to move out of an SDA property.

Check your lease agreement with your SDA provider. But in general, just like any other investment property, you will be responsible maintenance and repair cost such as annual smoke alarm, termite and pest inspection, electric inspection, gutter cleaning.

Tenants will look after their own cleaning and lawns. Tenants will be responsible where they have caused any damages to the property.

Check your lease agreement with your SDA provider. But in general, tenants will be responsible for usage of water and electricity, where your SDA property is leased to one tenant.

In case of multiple tenants, tenants are not required to pay, unless it is metered separately. Allow $500 per month as your total utility costs, as a starting point.

Generally speaking, rental income is not guaranteed, and it is based on occupancy of tenants, which means if your 3-bedroom SDA house has one tenant, you will get paid only for one tenant. You do not get paid simply because you have built or own an SDA house. Therefore, it is very important to select correct location, build right type of SDA house with correct configuration, features and space and above all engage a highly suitable SDA provider partner.

In recent days, we have seen few marketers, who are currently offering guaranteed rent of $50K to 80K per year, but that means nothing, as to enforce that you will be required select legal path option, which is very expensive and time-consuming process, and you may not have time or money or both. So, do not get fooled by guaranteed rent promise. Anyone offering you rental guarantee, you must ask them to provide you with a baker’s guarantee, then you will see how they run away.

Rental guaranteed option is really win-win for only to the party who is offering, because they will only pay you, if they find tenants. In that case, they will make $200K and they are paying you only a fraction $50K to 80K. In the event, they cannot find a tenants, they may not pay you, although they signed an agreement to pay you because to enforce the agreement you will need to take them to a court. They very well know that you do not money to do so, as you are already under a mortgage repayment stress.

Anyone offering you rental guarantee, you must ask them to provide you with a baker’s guarantee, as this is the only safest option for you, then you will see how they run away.

Just like any other investment property, tenants, rental income and 100% occupancy are not guaranteed. However, we have seen a good and reputable SDA providers generally have occupancy rate close to 95% – 100%.

We as well as research have shown that people with disability finds a home, they are happy with, they do not ever want to move. This means many participants want to stay for life when they are in appropriate accommodation.

Thy do not have many of external or internal factors like need for a good school, higher income job forcing them to move out of an SDA property.

To ensure that your SDA investment property is fully tenanted, it is crucial to work with a reputable SDA provider who can help you find suitable tenants and manage the property. Also ensure that:

• Property is built in a high demand area
• Correct SDA dwelling type is built
• Bedroom configuration is carefully selected and oriented
• Your property has appropriate feature and space
• Work with reputable SDA provider
• Sign a lease and start tenant sourcing early

Yes, every year around July NDIS publish new rental income price for SDA property. As a minimum it increases by inflation /CPI rise but in recent years, we have been rental increase rise by several thousands of dollars over and above CPI rate to attract more investors like you.

No, you do not sign lease with government or NDIS. Rather you will sign a lease with an SDA provider. But signing a lease does not mean that you will get a guaranteed rental income. Rental income is based on occupancy of tenants. So, if you SDA house is completely vacant, more likely you will not receive any rental income.

In recent days, we have seen few marketers, who are currently offering guaranteed rent of $50K to 80K per year, but that means nothing, as to enforce that you will be required select legal path option, which is very expensive and time-consuming process, and you may not have time or money or both. So, do not get fooled by guaranteed rent promise

Rental guaranteed option is really win-win for only to the party who is offering, because they will only pay you, if they find tenants. In that case, they will make $200K and they are paying you only a fraction $50K to 80K. In the event, they cannot find a tenants, they may not pay you, although they signed an agreement to pay you because to enforce the agreement you will need to take them to a court. They very well know that you do not money to do so, as you are already under a mortgage repayment stress.

Anyone offering you rental guarantee, you must ask them to provide you with a baker’s guarantee, as this is the only safest option for you, then you will see how they run away.

There are two separate leases involved in SDA property. One that you will sign with your SDA provider and another one that the SDA provider will sign with participant o tenants to sublease your property.

With your SDA provider, you will typically sign a lease for 10 or 20 years in an increment of 5 years. There are some SDA providers, who can offer guaranteed rental income about $50K to 80K per property per year, but broadly speaking rental income is subject occupancy.

Anyone offering guaranteed rental income, you must seek Banker guarantee in advance to protect yourself.

With participants, we are seeing 12 months to 5-year leases which protect the tenant and show that the home is intended for long term tenancy. However, NDIS participants always have choice and control and can break their lease at any time with reasonable notice (generally 60 days).

Having said this, we as well as research have shown that people with disability finds a home, they are happy with, they do not ever want to move. This means many participants want to stay for life when they are in appropriate accommodation.

Thy do not have many of external or internal factors like need for a good school, higher income job forcing them to move out of an SDA property.

After 20 years, it will continue to be an SDA property, but you may have to so some cosmetic renovation like painting etc to freshen up your property or do some major changes to make it up to standard, which is unknown at this stage.

Yes, SDA funding is here to stay for many reasons, in reality is not costing anything to the government.

A participant eligible for SDA funding on average costs $1.5 million to the government if they stay in unsuitable accommodation like hospital. By moving to an SDA house, the government only has to pay $60K to $100K to you as an SDA rental payment. This represents a massive savings to the government.

Another aspect, from each SDA house federal government will collect generally $250K to $300K in tax from carers’ salary, SDA provider profit and from your rental income.

SDA house arrangement is win-win for everyone – government, you, participant, care worker, SDA provider etc.

Yes, in certain areas, SDA houses have higher vacancy rates, this is because in certain areas in one single street or one land development estate, there have been 50 to 100 SDA houses built. This is obviously a case of oversupply.

A land developer or builders’ interest are not aligned with you, as they are not responsible to get tenants for you at build completion, so they will build as many SDA houses as you want at one location or at any undesirable locations as long as you pay them. Once build is completed their job is done and their profit is achieved, finding tenants become your problem or your SDA provider causing vacancy.

Another common problem that we see is – someone has a vacant piece of land, without studying demand or checking with SDA providers, they will build an SDA house with a hope that tenants will come. It does not work that way.

My friend has built an SDA house at a certain location, I will also build at the same location.

My cousin is a builder, and he will build cheap for us near to my house.

Every day we can numerous calls saying our property will be ready in 2 weeks, can you help us to get tenants. Yes, we can but it takes time.

Hopefully we have given you enough examples to demonstrate that even a great investment like SDA house can go wrong if not done correctly with right professional guidelines and help.

Yes, you can rent to normal market but in that case, you will only get normal market rent (not SDA rent). No modification is required unless your SDA house is badly designed, as all SDA properties come with both SDA compliance certificate as well as Occupancy Certificate (OC). OC means the property is suitable for normal people occupancy.

No training or qualification/licence is required to buy an SDA property. Consider SDA property like any other property and to buy an SDA property all you need is your own money or ability to get a loan from a lender.

Anyone can invest in SDA, including individuals, SMSFs, Trusts and corporate entities.

Consider SDA property like any other property and to buy an SDA property all you need is your own money or ability to get a loan from a lender. The same act, law, regulation and purchase contract applies as if you are any other normal property. Therefore, you will need a help of a mortgage broker, who can help you to get a loan. You will also need to engage a conveyancer or solicitor, who can look after legal matters and property settlement.

On the day of settlement, you will be the legal owner of the property (not NDIS or NDISA or any other parties).

Generally speaking, a new land estate may not close to all amenities and recreation areas including hospital or medial facilities. In addition, the new estate land developer, builders or marketers may join hand to build 10 to 30 SDA houses at once in one location due to land availability, which will not be desirable from supply point of view. As this area will be oversupplied more likely your SDA property will be vacant for a long term. It will be also hard to sell your SDA property, should you decide in future.

On contrary, in an established suburb finding a land is always a challenge, meaning there will no question of oversupply. Also, houses in an established are generally close to all amenities and recreation areas, including hospital or medial facilities.

So, in our view, SDA houses in established suburbs is the way to go.

Well, that is not your job. You should engage an SDA provider, who will source tenants for you. You must do this prior to signing any purchase contract for SDA property and ask them about SDA demand in the area, where you are buying your property, and likely hood of getting tenants.

You must finalise your SDA provider prior to signing any purchase contract for SDA property and must sign a lease agreement with the provider in parallel with your SDA property purchase. By doing this, your provider has certainty of you becoming their clients and they will mobilise their resources in securing tenants for you, whilst your property is being constructed.

Yes, you can buy as many as you like depending on your savings and/or loan borrowing capacity. There is no restriction from government or anyone else.

As SDA property is a very specialized property requiring extreme level of compliance, do not try to build yourself or simply engage a builder to build for you.

Contact some one like us, who can guide you throughout the entire process, starting from securing loan, sourcing property, managing construction compliance and finally getting tenants at the end.

Robust is standalone category, and only represents only 8 to 12% of eligible participants market. Chance of getting more than one participant is very rare. Even at times, it can be difficult to keep one tenant that your SDA provider may have sourced. Also, very high chance of property getting damages.

So, if you purely doing SDA investing for money, then Robust class may not be that appropriate. But make up your own mind and do research.

We go through technically proven process to ensure that my property will be 100% SDA compliant, and it will be accepted by NDIS. Some of these processes include:

• Design review and SDA provisional certification prior to starting construction
• 2-3 inspections during construction
• Final inspection and as built SDA certification

According to NDIS, as of June 2024, around 6500 active participants with SDA funding who are looking for a suitable SDA accommodation.

This does not consider eligible people, whose funding is yet to approved.

Yes, absolutely. See below projected SDA demand by 2042 for eligible participants.

According to NDIS, as of June 2024, there are around 9500 enrolled SDA houses.

Around 6500 active participants with SDA funding who are looking for a suitable SDA accommodation. This does not consider eligible people, whose funding is yet to approved.

We suggest investing only in High Physical Support (HPS) for 4 reasons:

• Rental payments are higher than other SDA categories.
• It covers 90% of eligible participants market.
• Improve Liveability and Fully Accessible participants can be accommodated under HPS house.
• Chance of your SDA being damaged is very slim.

Robust is standalone category, and only represents only 8 to 12% of eligible participants market. Chance of getting more than one participant is very rare. Even at times, it can be difficult to keep one tenant that your SDA provider may have sourced. Also, very high chance of property getting damages.

So, if you purely doing SDA investing for money, then Robust class may not be that appropriate. But make up your own mind and do research.

Chances are rare that you will have all 3 HPS tenants. More likely combination would be:

• 2 HPS + 1 IL
• 3 IL
• 1 HPS + 12 IL or 2 FC
• 2 FC + 1 IL

But in any case, and in any combination, your rental income will not drop significantly. The best case is to have all 3 HPS tenants and worst case is to have 3 IL tenants. Your rental income may drop 10 – 20% overall depending on combination of tenants but it will still by far better income generating property than any other rental investment property.

SDA houses demand is far greater than supply.

According to NDIS, as of June 2024, around 6500 active participants with SDA funding who are looking for a suitable SDA accommodation.

By 2042 (just in 16 years), NDIS projected demand for eligible SDA participants is forecast to be close to 37,000.

According to NDIS, as of June 2024, there are only around 9500 enrolled SDA houses.

$770 million budget has been allocated for SDA rental payment per year.

As of June 2024, only $316 million were paid in SDA rental payments. Only around 40% of allocated budget has used last financial year so far, this also highlights under supply of SDA properties.

Yes, you can buy a built SDA property, but typically built SDA properties are very rare to find, as most people would not like to sell, when it is time to get reward by receiving rental income.
However, people circumstances do change, and some are forced to sell due to their unique circumstances.

So, mostly sold SDA properties are Land & House package. You should allow 12-15 months for completion. 3-5 months for approval and 7-9 months for construction.

First you will need to settle land and then once approval is received, construction will commence. Progressive payment will be required to be made as building construction progress.

As soon as land settle, your mortgage will start, and it will gradually increase as building construction progresses. You will be funding your entire contraction without receiving any rent, therefore we always suggest having $40K – $50K extra for construction payment if you are cash tight.

Yes, you can sell it anytime, as you are the legal owner of the property. Just like any other investment property, most times, you will sell your property with existing tenants (that means tenants are not required to be removed) and lease in place.

No, not at all, as you will be selling your SDA property to another buyer as an SDA property. So, there is no need to modify. In fact, any modification will make your SDA property non-compliant and you must attempt to do so.

Yes, you can, however it is not recommended, as most normal real estate agents do not understand how SDA property works, hence they are not able to sell your SDA property at an optimal price.

Please reach out someone like us, who is an SDA Property Specialist.

Like any investment, there is a degree of risk associated with investing in SDA properties. However, the risks can be minimized by conducting thorough due diligence and working with experienced professionals.

One of the biggest risks is vacancy. Your rental income is based on occupancy of tenants, which means if your 3-bedroom SDA house has one tenant, you will get paid only for one tenant. You do not get paid simply because you have built or own an SDA house. Therefore, it is very important to select correct location, build right type of SDA house with correct configuration, features and space and above all work with correct SDA provider partner.

Based on current demand level, we have not seen any issues in getting tenants for an SDA house, but this is still location dependant. Some areas receive tenancy offers prior to the build commencing, some are slower. We generally say to expect your tenant(s) moved in within 3 months of completion. Some areas are unfortunately seeing longer vacancy due to a number of factors. No tenants can move in for the first 28 days of completion as it will need to be enrolled with the NDIS. We do not take responsibility for vacancy risk or location factor information.
Always consult with a qualified advisor on where to invest and check to see if the product is right for you.

To ensure that your SDA investment property is fully tenanted, it is crucial to work with a reputable SDA provider who can help you find suitable tenants and manage the property.

Here are some myths about SDA investing:

• SDA property investment is
• SDA property investment is too complicated to understand
• Time to buy SDA property was 4 years ago and it is too late now
• NDIS/SDA funding is not sustainable
• SDA properties are oversupplied
• SDA property does not grow in value
• It is hard to sell SDA property
• I need to modify my SDA property before I can sell
• Lease is signed with NDIS
• There are different buying and selling process apply for SDA property
• Interest rate for SDA property loan is higher
• SDA loan is done through private lender
• NDIS Loan is harder to secure
• NDIS property valuation come mush lower than purchase price

Every situation is different but, in our observation, this is completely incorrect. We see a typical growth of $100K to $150K just once construction is completed.

During the life of SDA property, it will outperform capital growth for a normal property by far. Something that gives more money must be valued more.

Imagine in 2030, your neighbour single storey house built in similar land giving $45K pa rent got sold for $900K. What will be value of your property that will be giving $260K pa (estimated rent)? Obviously, it will be a lot more $900K, because something that gives more money must be valued more.

In other words, normal property growth becomes benchmark for your SDA property price negotiation, and you will get a lot more than a normal residential property.

It can range vastly.

As a guide, 185M2 to 200M2 High Physical Support SDA house with 2 participants bedroom and 1 carer room, can cost anywhere between $500K to $650K depending on location, specification, inclusion, features and upgrades. This is excluding land cost.

First, it is inappropriate to compare SDA property with a normal residential property, and then conclude SDA property is more expensive. SDA property and normal residential property are completely different type of asset, and it has different target group.

We must always compare like for like. Would you compare Kia with BMW and say BMW is more expensive. We hope you are getting the idea.

SDA houses are constructed in accordance with strict NDIS guidelines and include many specialise features, which are not available in normal residential houses. Earthworks of SDA house require very sophisticated operation. SDA houses have super big disable toilet and bathroom in each room, building frames are designed to accommodate higher load, building materials used are vastly different, SDA houses have numerous automated features, also have power back up provision and so on. In addition, SDA houses are custom build and are not done in mass production like normal houses, hence builders do not have bulk bulking savings power. Due to these unique requirements and customisation, SDA houses are expensive in the range of $100K to $150K depending on location.

Every situation is different, so we cannot guarantee but we see a typical growth of $100K to $150K once construction is completed.

Everyone is different and we think and act differently.

We all know exercising every day has great benefits to our health, but still most people do not do exercise.

Why??

This is called knowing and doing gap, which means you know but you just do not do it. The same applies when it comes to SDA property investing. Besides these, there are other factors such as:

• Some also do not have adequate savings or equity of around $135K that is required for buy an SDA land and house You can buy a normal residential property with a little savings as $50K.
• It is too complicated for others to understand how SDA property works and how it can benefit them
• There are some people, who believe SDA property is scam, whilst it is not the
• Some are very comfortable in investing normal residential property and they do not want to leave their comfort
• Some believe NDIS/SDA funding is not sustainable, hence they do not This is far from reality and truth.
• Some believe SDA properties are oversupplied (this is truth only in certain areas but not in general)
• Some believe time to buy SDA property was 4 years ago and it is too late now (still now is a good time based on NSID projected demand of SDA eligible participants)

In other words, everyone has their own believe, perception and reality that prevent them from investing in SDA property.

Charles Darwin once said – survival for fittest, which means only fittest people will survive in the world. To keep us fit, we as a human need to constantly change ourselves in various forms – knowledge, skill, income, physical fitness, communication skill etc.

A business or a government scheme are the same, there must be a continuous change to make it fittest for survival. In other words, changes are made to service, not to die.

Government other schemes like Medicare, agreed care, childcare that exist today, are not in the same form when these were legislated many years ago. There have on ongoing changes to make these schemes sustainable and these schemes are still here and will continue in future.

The exact same things are happening with NDIS and it is here to stay just like other schemes Medicare, agreed care, childcare.

Consider SDA property like any other property and to buy an SDA property all you need is your own money or ability to get a loan from a lender.

The same act, law, regulation apply for SDA purchase, sell and ownership as if any other normal property.

To buy an SDA property, you will need a help of a mortgage broker, who can help you to get a loan. You will also need to engage a conveyancer or solicitor, who can look after legal matters and property settlement.

On the day of settlement, you will be the legal owner of the property (not NDIS or NDISA or any other parties).

For selling, you will need NDIS Property Specialist like us, as most normal real estate agents do not understand how SDA property works, hence not able to sell at an optimal value.

In certain Sates like Victoria, you can get exemption from paying land lax for SDA properties.

Costs associated with buying an SDA property are similar to any other residential property, except:

• You need to allow for $10-$15K for common area furniture
• Propery valuation fee is typically $3000 (much higher than normal residential property)
• Lender fees and charges can add up $2000
• Lender risk fee may be higher than typical LMI fee (Lender’s Mortgage Insurance)

All other normal costs are such as:

• Deposit
• Stamp duty
• Conveyancer fee
• Registration fee
• Lender’s typical fees and charges
• Risk/MLI fee
• Building & pest inspection for built property

According to NDIS, $770 million budget has been allocated for SDA rental payment per year.

As of June 2024, only $316 million were paid in SDA rental payments. Only around 40% of allocated budget gets used last year so far, this also highlights under supply of SDA properties.

Yes, it is absolutely in long term for many reasons, as in reality is not costing anything to the government.

A participant eligible for SDA funding on average costs $1.5 million to the government if they stay in unsuitable accommodation like hospital. By moving to an SDA house, the government only has to pay $60K to $100K to you as a rental income. This represents a massive savings to the government.

Another aspect, from each SDA house federal government will collect generally $250K to $300K in tax from carers’ salary, SDA provider profit and from your rental income.

SDA house arrangement is win-win for everyone – government, you, participant, care worker, SDA provider etc.

Based on current demand, around 15,000 SDA houses are required to build to meet current demand. Keeping in mind it is project to grow significantly in future.

Assuming $1 million per SDA house, it will require $15 billion investment, which government does not have to start with. Even if they have money, government are not good in managing projects anyway as we know, so more likely they would stuff it.

From financial point of view, government is savings their $15 billion investment, which investors like you are spending. In return, government is paying a fraction of their savings in rental payment to you which is very attractive to most investors. So, again this is win-win for everyone.

Average of what we are seeing is 10 – 15% of all incoming rental income, plus an onboarding (advertising, administration, finding, documentation, etc) fee of between $3,000 and $10,000 per participant. We do work with a couple of providers who do not charge any tenant finding fee, on boarding fee, compliance fee, advertising fee etc.

No. SIL providers are paid from the participants NDIS plans. There is no money exchange between the SIL and the SDA Provider, or owner. The SDA funding for each participant includes funds of the OOA (Onsite Overnight Accommodation).

Generally, we are seeing 12 months to 5-year leases which protect the tenant and show that the home is intended for long term tenancy. However, NDIS participants always have choice and control and can break their lease at any time with reasonable notice (generally 60 days). Having said this, we as well as research have shown that people with disability finds a home, they are happy with, they do not ever want to move. This means many participants want to stay for life when they are in appropriate accommodation.

Thy do not have many of external or internal factors like need for a good school, higher income job forcing them to move out of an SDA property.

This is location dependant. Some areas receive tenancy offers prior to the build commencing, some are slower. We generally say to expect your tenant(s) moved in within 3 months of completion. Some areas are unfortunately seeing longer vacancy due to a number of factors. No tenants can move in for the first 28 days of completion as it will need to be enrolled with the NDIS. We do not take responsibility for vacancy risk or location factor information. Always consult with a qualified advisor on where to invest and check to see if the product is right for you.

To ensure that your SDA investment property is fully tenanted, it is crucial to work with a reputable SDA provider who can help you find suitable tenants and manage the property.

All SDA properties need to be enrolled with the NDIS to be able to make a service booking, receive funds from the NDIS, and legally tenant NDIS participants. Enrolment is carried out by the allocated SDA provider and takes up to 28 days once submitted. the following documents, amongst others, will need to go with the submission:

• Design Certification
• Final As Built SDA Certificate
• SDA Assessment Summary
• SDA checklist
• Occupancy Permit
• Owner consent
• Council Rate Notice

You can not rent or advertise property unless SDA enrolment is completed.

Typically, yes – you will be required to provide furniture for common areas, unless you have negotiated something different with you SDA provider.

Tenants rent a room in an SDA home with their SDA funds. As such, they are responsible for furnishing that room. Prior to moving in, the home will need to be furnished in the main living areas. This includes Fridge, Washing Machine, Dryer, Microwave, TV, TV Cabinet, Lounge, Dining Setting, All Kitchen, Laundry, and Bathroom Supplies.

Typical furniture package cost ranges from $10,000 to $15,000 and is done in a day with between 2- and 4-weeks’ notice:

Generally, yes. Again, this is a negotiation between SIL, SDA and owner. Fire package includes the following for $1000 – $1500.

• 2 x Fire Extinguishers
• 1 x Fire Blanket
• 2 x Photoluminescent Exit Signs above front and back doors
• 2 x Emergency Evacuation diagrams
• Certification

Please note that SDA / SIL providers may have requirements outside of this list.