What is SDA Property under the NDIS
A very high percentage of people in Australia with Disability are in unsuited accommodations.
This is also costing you the tax payer, and the Australian Government serious $’s to house them, and worst of all in unsuited dwellings.
The NDIS have provided you the Investor with an opportunity to purposefully build a SDA Home (Specialist Disability Accommodation) that has to look and feel just like any home, yet include modifications to suit the disability category you are wanting to attract as your tenants.
Tenants are called Participants and the income from the NDIS and from the Participant equate to Yields of 12% to 16% (sometimes lower and sometimes higher)
Wanting very high yield investment property?
Invest in a SDA home
NB : Investing in a NDIS Property is an incredible investment when you know what to look for so you get it right, from the outset.
So we thought we would start off sharing with you what you need to be aware of when considering if you should invest in a SDA Property under the NDIS.
Be mindful not to be attracted to a market offering appealing to your greed or fear of missing out. SDA Property Investment comes with layers of complexities, and it is natural that “when you don’t know what you don’t know, how can you make an informed investment decision.?”
It is unfortunate that when ever the Australian Government budgets for a brilliant initiative such as SDA Property, that it also brings out those that are greedier than you and I are and thus structure things so that they too earn a high income off the back of your investment.
What to be mindful of before committing to yourself?
Rental Guarantees – they do not suit you the investor when you understand how they work, and are very risky in terms of who is guaranteeing the private company offering you the rental guarantee? And why would you want them to earn as much or even two thirds more than you do and you have taken all the risk? See explanatory video here
Long Head Lease Agreements – again they do not suit you the investor when you understand how they work. You will see these agreements offered for 10 years or even 5 x 5 years renewable. Ask what your exit clauses are if you find that they are not managing your property as you want them to or if you find a manager who has a far lower management fee than they do??
Floor Plans – there are market offerings out there that are just too cheap. It is not possible to cut build costs unless you sacrifice on floor plan size, fittings and fixtures, specifications required by the NDIS etc. We know that land cost is land cost and fixed. We also know what material and labour costs to build. If the offering is cheaper than the industry average, it is appealing to your sense of greed … be very mindful. Read more here
SDA Property Rental Management services – only a licensed SDA Provider (Rental Manager) can manage your investment property for you and ensure you receive the significant income from the NDIS and your Participant. Be very mindful of their fees and head lease agreement terms. Total charges include management fees, any annual compliance fees or other fees no matter what they are called, they are still a fee. A management fee totaling around 15% is reasonable to the rental manager and to yourself as there is significant compliance work required for you to get your income. Read more here
Purpose of a SDA Home
Your participants know that they have the opportunity of choice! If you build cheap to save a dollar and sacrifice on floor plan space, your tenants will move out when a better SDA home is built nearby. Meaning cheap upfront will cost you way more over the life of the investment.
Build to attract and keep your participants, there is a significant income that will come your way and the purpose of this high income is to encourage you to build to suit what your fellow human being wants to live in that also includes sufficient common area space and disability modifications to make life pleasant whilst providing them with a place to call home.