Specialist Disability Accommodation: A High Yielding Ethical Property Investment

Being Australian is all about giving others a Fair Go. Under the NDIS, the Specialist Disability Accommodation investment market has opened up. It has provided the private sector with a fantastic opportunity to help disabled Aussies find a suitable home, and be financially rewarded for doing so. 

So, what is Specialist Disability Accommodation?

Falling under the NDIS framework, Specialist Disability Accommodation refers to purpose-built homes that are designed to meet the needs of disabled Australians under the age of 65. When SDA was announced, a projected 28,000 NDIS participants would be eligible for Specialist Disability Accommodation, as they were placed in unsuitable living arrangements e.g. aged care homes.

Through the SDA scheme, the Australian Government aims to place all SDA-eligible disabled Australians in fit-for-purpose homes. In order to achieve its goal, it has turned to the private sector to build these homes. To help meet market demand, the government is handsomely rewarding investors for getting involved.

Who can invest in SDA?

Literally anyone, including people with a Self Managed Super Fund. There are, however, some rules to be considered and barriers to be overcome when it comes to Specialist Disability Accommodation investment. Namely, there are two main issues, being:

  • Registering through an SDA provider
  • Matching properties with tenants

Registering through an SDA provider

Each property must be registered through an SDA provider, meaning that your investment property must adhere to the NDIS’ terms of business, SDA suitability guide, as well as quality and safeguard prerequisites. Furthermore, an SDA provider must ensure that your SDA dwelling fully complies with all applicable codes and laws of the Commonwealth, and State and Territory levels.

Matching properties with tenants

Having a registered property is not enough to receive SDA payments. As an Investor, your provider will be responsible for finding suitable tenants and making sure that your property is suitable for those dwelling inside your investment property. The Government does cover vacancies for up to three months, though your property will need to have tenants in order for you to receive SDA payments, so choose your provider wisely, based on their skill set & their relationship with care providers, as this is where demand is driven.

What kind of an investor may SDA be suited to?

Specialist Disability Accommodation is designed with the purpose of improving the quality of life for Australians with disability. As such, SDA investment may be suitable for ethically minded investors from Australia’s private sector, as well as institutional investors. Finally, although there is a specific set of rules to follow, self managed super funds (SMSF) can also be used to invest in Specialist Disability Accommodation.

What can investors expect in return for their investment?

Specialist Disability Accommodation gives investors the opportunity to do just that while being handsomely rewarded for being involved. Below are some of the major benefits that investors will inherit. 

  • SDA investment properties can generate yields of up to 10-12% after expenses. 
  • Payment rates will increase according to CPI each year for the next 10 years, provided you enrol your property before June 30, 2022
  • The government will continue to make SDA payments to investors for up to three months in case of property vacancy.
  • The SDA market is currently grossly undersupplied. The government has projected at least 28,000 participants as eligible, the word on the ground is this figure looks to double.

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