FAQS

The National Disability Insurance Scheme is a government initiative implemented to provide financial assistance to hundreds of thousands of Australians with a significant and permanent disability and their families and carers. The NDIS is designed to assist people with disabilities to live more independently.

A ‘Participant’ is a person with a disability who has been accepted into the National Disability Insurance Scheme and receives funding to purchase supports and services that will help them achieve their goals.

A ‘Provider’ is a person or business, that offers supports and services to a Participant. With respect to SDA, a SDA Provider will hold a lease with the property owner. The provider acts as the ‘Property Manager’ and sources participants as well as deals with the care providers who look after the tenants. They also do all compliance and invoicing with the NDIA.

Some participants (currently around 3.4% of all participants) in the NDIS will receive funding for SDA. SDA stands for ‘Specialised Disability Accommodation’ and is a system created under the NDIS for people with high support housing needs to ensure they are able live more independently and receive support they require whilst at home in specially designed or adapted homes to help deliver their support needs.

The funding for SDA housing has been allocated to allow these participants to live seamlessly in society, relieving pressure on nursing homes and aged care facilities and hospitals as well as families who have been supporting their loved ones in the family home but are finding it increasingly difficult to do so in homes that are inadequately designed to suitably house participants with very high support needs.

Supported Independent Living (SIL) is help or supervision with daily tasks to help a participant live as independently as possible, while building skills.

Supported Independent Living (SIL) is funding for the support or supervision of daily tasks to live independently. Specialist Disability Accommodation (SDA), on the other hand, is the ‘bricks and mortar’ component - funding for housing for people with disability who have severe functional impairment or highly complex support needs that require specialist housing alternatives. Essentially SDA funding is rent paid by the NDIA for a participant with SDA funding in their plan.

Whilst some people have SIL funding in their plan without requiring SDA funding, many have both. As having very high support needs and/or an extreme functional impairment is a requirement to qualify for SDA, it can be assumed that the majority of people with SDA will also have SIL funding.

This is the Maximum Reasonable Rental Contribution (MRRC) paid by the tenant, capped at 25% of the base rate of the Disability Support Pension and 100% of any Commonwealth Rental Assistance scheme. This is the same for the participant no matter where they live; it is currently $12,058 p/a per person (as of 20th March 2024).

The SDA payment from the NDIS is a standardised annual amount calculated based on the dwelling’s location, size and level of accessibility. This is on a per-tenant basis. Payments for a SDA property are paid differently to that of a non-SDA property. Your rental payments will be paid to you from SDA Provider at the end of each calendar month. Each Tenant’s payment is made up of 3 parts:

• Reasonable rent contribution (RRC): (25% of base disability supplement) Paid Fortnightly by the participant (tenant)
• 100% Commonwealth Rent Assistance Paid Fortnightly by the participant (tenant)
• NDIS SDA Payment (Refer to the NDIS SDA Schedule) Paid Monthly in arrears.

The NDIS (National Disability Insurance Scheme) provides the SDA funding for people whose disability or ongoing very high support needs require special accommodation which enables them to receive housing, care and onsite support by their carer. There are 4 levels of NDIS SDA homes each designed for a different level of disability and care:

• Improved Liveability
• Fully Accessible
• Robust
• High Physical Support

There is a huge shortage of suitable accommodation currently available for NDIS participants. Recent NDIA data* states that in addition to the 14,088 people already residing in SDA housing, a further 10,053 people have SDA funding they are not utilising or are eligible for SDA. Of these, thousands of people are currently residing in aged care facilities despite being under 65 years of age or are living in hospitals as they have nowhere suitable to move to! Furthermore, upwards of 13,000 places enrolled are SDA existing and legacy housing. Many of these properties are not fit for purpose and will need replacement by New Build SDA in the coming years.

* NDIA data 31 March 2024

Yes. The SDA funding under the NDIS is a legislated commitment of Australia’s Commonwealth, State and Territory governments, set out in the NDIS SDA Rules (2-18) under the NDIS Act 2013. This legislation provides the foundation for government’s long term and firm commitment to SDA funding under the NDIS. Beyond the legislative commitment, SDA funding enables eligible participants to achieve better outcomes while representing value for money for the NDIS, saving the government and taxpayers a lot of money otherwise spent on accommodating the applicants themselves.

There’s a bipartisan agreement that’s been signed off by all the parties in Canberra – SDA properties have a 20-year timeframe of SDA Certification. All the States and Territories also are unified in this program to ensure federal funding goes where it’s supposed to go. To change or remove such legislation, it would need a lot of political will and time-consuming discussions, resulting in substantial expenses to accommodate for participants in hospitals once again.

The SDA policy is an ambitious initiative requiring $5Bn to build housing. Government cannot achieve this and thus launched the $700M a year SDA Scheme to create an investor and user driven market. Empowering people with disability to decide where they live and who they live with. The package of support includes annual funding to pay for the cost of their housing where the participant has a separate amount in their package to pay for their attendant care support needs to live independently in our communities.

The NDIS’s SDA funding scheme will provide accessible housing for those Australians with a disability who require specialised housing. Housing is delivered through an ongoing subsidy for people with a disability to access housing. Before NDIS was implemented, the funding for housing people with disabilities mostly came from governments or non-profit providers using upfront capital grants. As lenders have started to become more lenient and are lending to finance SDA projects, there is a growing appetite among investors for investing in SDA housing projects. Out of the 650,000 participants in the NDIS, 22,022 currently have SDA funding (as of 31 March 2024) and the NDIA has reported they expect up to 30,000 NDIS participants will qualify for SDA by 2032. This means there are likely as many as 8,000 people in accommodation that is inappropriate for them because it doesn’t meet their needs, they are isolated from the community, and they really have no choice. These participants are likely living in residential aged care, government housing, hostels, hospitals or with family in unsuitable situations (inappropriate design, living with aging parents, etc).

Additionally, there is a need to replace existing old disability dwellings with contemporary SDA. This means the real demand for new housing could be considerably higher than 8,000 places over the next 10 years, as current SDA tenants in basic and legacy housing look for alternative homes. There is an incredible need and a chronically short supply of quality SDA dwellings in the right locations. The SDA scheme is designed to address the massive under supply. Demand is not the problem here, and if you can build the right home for the participants, then your property will not face the problem of vacancy. Furthermore, the government wants to motivate private investment of $5 billion to encourage the build of brand-new residential properties built for inclusion in the scheme. The government has committed $700M per annum in the SDA scheme funding from the overall NDIS annual budget of $51B. Your investment property not only provides rental income for yourself, but it provides the perfect home for Australians with disability – moving them out of inappropriate aged and other institutionalised care and place them in suitable housing. This is a perfect example of ‘Impact Investing’ – a win-win situation.

You enjoy a combined revenue from SDA payments, Maximum Reasonable Rent Contributions (MRRC) and then the proceeds from the sale value of the property when you choose to sell. The housing market is developing for people with disability accommodation needs, and is highly underfunded. The NDIS is radically transforming thousands of lives for the positive in an inflexible market where these consumers have limited choice. It is a planned shift from segregated and institutional disability housing and a major move towards genuine choice and community inclusion through NDIS SDA property. It is transformational for a person with disability. It is also a “feel great” investment for you, the investor, making it an ethical investment.

The approach to SDA funding has been to make investing in accommodation designed for NDIS participants both commercially viable and attractive for investors. A summary is as follows:

• The NDIS is attractive to investors who want a long term, steady income, while receiving market-beating yields.
• NDIS properties are being built in high demand areas where clients are already investing.
• Gross rental yields of up to 15% on the high end, and 8% gross yields on the low end. However, after costs, investors should expect an average 6-12% pa net return just to be conservative, as it depends on many factors
• Prices start from around $700K, and can range up to $1.7M, as a ball-park figure. It all depends on land prices in the area selected,  and the inclusions required for the different category of participants living within the SDA home

There are different builders building NDIS SDA Homes and there is no official builder registration. A good builder will provide a quality home which is compliant with current NDIS SDA design guidelines. It takes around 10-12 months to build a NDIS SDA approved home (depending on in which State and weather). There are Builder’s warranties provided on structure for 6 years and other build warranties and guarantees as per any other property.

The land and location must meet SDA requirements, so not just any block in any location will be suitable. The land must have no more than a 7-degree slope to the road to be approved. Proximity to transport, shops, entertainment, and other essential services is critical to enabling people with disability to easily leave their homes and live a meaningful life. When investing in a NDIS home, ensure they are within proximity to amenities such as health care, employment hubs and transport. We ensure our SDA House & Land packages are located where the highest demand is.

We have House & Land packages, Off-the-plan Apartments and Development sites in most states around Australia. Additionally, as the market starts to mature, we are able to offer the occasional built and tenanted SDA home for sale.

To meet stringent requirements under NDIS guidelines, the homes include many features the house next door will not have and thus present as a higher cost to build. These homes need to have a larger floor plan for ease of mobility, depending on the category of SDA (Robust or High Physical Support etc) the homes must include materials sound enough to withstand damage from wheelchairs or movement and thus require stronger materials for floors and walls. Some of the categories require full home automation for lights, curtains, windows, and doors. Each build is customised and not cookie cut like most new builds built by volume builders. Material is not purchased in bulk as done with volume builders and thus also costs more. Based on requirements, materials used, customisation, automation, floor plan size etc the cost per square metre in no way can be compared to the new home being built next door.

Other factors that affect cost are additional compliance and reporting for building codes, local council regulations and other requirements.

Factors that affect the valuations are: the size of the home being too large, or the land price is way too expensive given the demand right now in certain areas, and the fact that these homes may have a lot of special features and that naturally pushes up the cost. We know of builders who are thinking of doing very high custom builds which aren’t necessary, just

because the SDA provider wants the “bells and whistles” plus gold plated toilet seats (kidding!) The problem is that these features push up the cost of the build but make zero difference to its valuation, and as a result the valuations can come in lower than expected. We advise investors to allow for a 15-20% discrepancy in the valuation, and thus it is recommended that investors have cash or equity of around $350,000 – $450,000 (for a 20% deposit + valuation shortfall + SDA provider costs + loan repayments during construction). In addition, the lender may calculate the serviceability of the investment property based on a market rate of 4%-5% pa rental income, not the expected rental return forecast. This also plays a part in their calculations in valuations because their job is to protect the lender and the mortgage insurer, not the borrower. We recommend you work with a lender who has an in-depth understanding of the NDIS property market.

This always depends on the location and builder. At the lower end of the scale, a build could take as little as 5 months, but in other areas it can be a 12 month plus time frame. We provide estimates for each property we have for sale.

Once you have the Certificate of First Occupancy, the property can be enrolled with the NDIA (completed by the SDA Provider engaged to manage the property).

Yes, each home is offered a 6-year structural builder’s warranty dated from practical completion. This warranty covers structural items and faults of original workmanship.

There is a 12-month maintenance period on build so any maintenance issues or defects that come to light within this period are the responsibility of the builder to fix and repair, at no additional cost to you. Fixtures and fittings are covered by the manufacturer's warranty applicable to each item e.g., oven and cooktop.

Compliance is checked at several stages throughout the process:

1. At the Plan Stage before committing to the land and build contracts, the plans receive a Provisional Design Certificate from an SDA assessor. This then goes into local council for Building Approval like a normal house build.
2. At the Frame Stage, The SDA assessor should come to the site to ensure that the approved plan is matched.
3. At Completion. Final SDA Certification will happen when the home is at Practical Completion. This process ensures that the investor will be able to receive SDA funding.

Without certification the house will never be able to have NDIS/SDA tenants and therefore will not receive the high returns.

The Specialist Disability Accommodation (SDA) design standards released on October 25th, 2019, mandated an NDIS accredited SDA assessor is required to assess and provide certification of an SDA

property. SDA assessors must be approved by the NDIS and can be from 1 of 4 professions:

• Builder surveyors
• Architect
• Occupational Therapist
• Access Consultant

Yes, the builders we work with will have High Physical Support design as well as the other variety of different specs and design layouts for the other categories.

No, we cannot be sure of who the participants will be that ultimately live within your property. Even though a High

Physical Support design is built, the participants may end up being a combination of “HIGH PHYSICAL SUPPORT”, “IMPROVED LIVABILITY” & “FULLY ACCESSIBLE”.

We offer these homes to investors who fully understand the downside of these investments but are prepared to accept

those for the higher cash flow they should get. The downside is that they are building a more bespoke home to allow for wheelchairs so the bathrooms, corridors etc. are a little larger than normal, which may not be seen as the same value as the

house next door. These homes still look like a regular 3 or 4- bedroom home from the outside, but as you’d imagine, you can

notice the additional features on a casual inspection of the property and this may slightly impact the future sale value.

The SDA provider is the company who is tenanting and managing the property. They handle everything. They do the monthly submission to collect the SDA payments according to the number of tenants you have and the payment category they are in. They also collect the Maximum Reasonable Rent Contribution (MRRC) from the tenants. This is then forwarded to your account monthly (less their management fees). They also do the annual audit of the property that is required, but this is not an additional fee as it is covered by their management fee. Your experience of it is very passive, it’s mostly hands-free except for the annual rates and insurance bills etc. This is called ‘armchair investing’. You sit back and let the professionals deal with all matters relating to your NDIS investment property.

Yes, they are finished and “ready to rent”. Turnkey is a word too loosely used in the building world and can in fact represent a very low level of finish (i.e., no clothesline, mailbox, gardens etc.). The builders we work with have NDIS compliant inclusions that make sure there is no further spending is required for the property. You of course get to go through this contract in detail with your lawyer during the cooling off period, just like you would for any property.

Currently, around 50% of the packages we have for sale are on land that is registered or close to being registered. In some cases, the packages have been put together on land that is still undergoing development and registration may be some months away.

We are seeing a lack of affordable land in most of the major cities and larger regional towns. Additionally, many potential tenants will want to live in an already established area close to families and support networks. They do not wish to live in new estates and developments which is where most of the available land is. The SDA Price Review of June 2023 has addressed this to some extent by increasing the funding levels and location factors to provide greater returns in areas where land in in-demand locations has up until now been too expensive to allow for a feasible investment. High demand for house and land packages is creating a fast-paced market with new land releases selling out in under a week. Developers often now require pre-approval letters or a broker qualification letter with an EOI. In some cases, larger deposits of $5,000 are now needed. With the influx of owner occupiers in the market, developers are less interested in selling to investors and are favouring direct sales. It is therefore vital to act fast and to always complete everything on the EOI forms to ensure you don’t miss out.

Participant-led strategy basically refers to packages put together by providers and builders which have participants (as tenants) ready for the particular house in the particular area for the package presented. This is the safest way for investors to move forward with an NDIS investment as the provider and tenants are already in place. All that needs to then be done is construction of the house. This is rare as there are so many buyers who want to purchase a participant-led package and most of the time, investors would need to follow providers into certain areas where they have endorsed the location as a high demand area for participants with SDA funding. This is a provider led strategy.

We have House & Land packages as well as Units and Villas available, in Brisbane, Sydney, Melbourne, Adelaide, Hobart,

Darwin and Perth and we have packages also throughout QLD, NSW, VIC and SA in regional centres.

As the market matures and we see an oversupply of low quality SDA being built in the outskirts of the major cities where land has been readily available and less costly, we now see an increasing undersupply of good-quality SDA in the inner metro areas of the big cities.

If you are considering renovating an existing property, you need to consider the following points:

1. The property needs to have been issued a certificate of occupancy on or after April 1st, 2016.
2. The refurbishment must meet the minimum requirements for the selected Design Category OR
3. If the property is older than April 1st 2016, the design requirements must be met for the selected Design Category AND the cost to refurbish or renovate the home must meet the minimum requirements in the NDIS’ Pricing Arrangements for SDA (2023-24) Appendix G —Minimum Refurbishment Costs for New Builds.

The required minimum costs to refurbish are high, making this option generally not financially viable.

OOA refers to Onsite Overnight Assistance and is an addition to the SDA funding if included in the dwelling. This is a room that has been included in the dwelling (House/ Villa/ Townhouse) or in the unit complex (a separate apartment or studio room). This room is for the Onsite Carers to use as anoffice and a rest area, so it usually will include a bed for overnight carers as well as a bathroom and kitchenette if it is a separate unit. When included in an apartment complex, one OOA room can be provided to a maximum of 10 SDA units. I.e., if 15 SDA units are in the complex, 2 OOA rooms are needed for all units to qualify for the OOA funding. In a house, villa o townhouse, the OOA room must be accessible by the participant with required door circulation spaces applicable.

We will refer clients to an appropriate SDA Provider to assist, however each investor is free to engage whichever SDA Provider

they wish in order to procure participants for the home. An SDA Provider, once engaged, will be the specialist property management firm that works with NDIS Service Providers in assisting their NDIS clients to apply for and be placed in suitable Specialist Disability Accommodation. This process can an should start as soon as the finance has been approved and prior to commencement of build, with the intention of having the property occupied as soon as possible after the property is completed.

Initial leases will be for 12 – 24 months where possible, but once locked in, they’ve been considered as ‘forever homes’. NDIS homes are built to a very high standard. They do not present as a hostel or overcrowded old-style disability housing. These homes are built and designed to a high level, to accommodate and last.

While there is a massive demand and shortage, there is absolutely zero guarantee that anyone – the SDA Provider, the SIL Provider or the Builder – will guarantee you tenants. It’s simply impossible to do that and anyone doing this is to be avoided. However, based on

research undertaken, many disabled SDA residents want to “stay for life”, when they are in appropriate accommodation and our team have mitigated that risk as much as possible, thanks to the process of building the design of the home according to participants requirements in the area, and consulting with the SDA and SIL provider(s) as to whom they have on their waiting list for accommodation.

Sometimes, we may only build once we have participants qualified and thus building to their specific requirements (custom build) but this will potentially add to the price tag. Then, and only then, is there is a very strong chance that the property will tenant quickly after completion of the brand new house. The SDA provider must be approved with NDIS, and the house must be approved by NDIS. We are not going out to market to find a ‘block of dirt’ to get a house

‘plonked onto it’ just to leave it empty. That’s not what we do! When our team put a property together, the steps are:

• Coordinate with the care organisation and meet the need where they have existing demand.
• Test demand in new areas by placing ads to get interest or applications from tenants.
• After establishing demand, we first need to find land that complies with the NDIS specifications.
• After identifying sites we then need to confirm that the location meets the requirements of the care organisations.
• Determine the right house design wanted by the care provider can be placed on the land.
• Present property package to our investors (i.e., you).
• Take sales advice deposit from investor.
• Have the sales contracts for the land and construction drawn up from the land developer and the builder. Note: we have fixed price contracts with zero variations allowed to eliminate any surprises during construction.
• Contracts signed and returned to the builders, and you enter the standard finance period before moving on to unconditional.
• Upon moving to the land settlement or slab phase of construction, the SDA provider should be engaged by the investor to begin the process of vetting tenants on-boarded into the SDA. This gives them around 6-9 months to have tenants prepared and ready to move in on completion of the new home.

What we say to anyone looking at investing in NDIS property, is that the absolute WORST CASE SCENARIO, is that the house can be rented on the open market at market rate, e.g. $600/w, if there are no participants available to rent the brand new home. Yields would be about 5.0% pa usually, but the likelihood of this happening is very unlikely if you build a good quality design in a high demand location. The demand right now, is very strong, as the program is still quite

new and there are many more participants than properties. If you are building a NDIS home in an area where there are 40 people on the waiting list to find accommodation, then the chances of having a vacant SDA property are slim. The only question mark will be what level of funding your tenants will have as this will affect the overall income.

Like all ongoing investment property ownership, there is always the risk of losing a Tenant. Although research has shown that once someone with a disability finds a home they are happy with, they don’t ever want to move. Unfortunately, however, many SDA funded NDIS participants do have degenerative diseases with a higher mortality rate, so there is always the likelihood of losing tenants over time, even if the tenant is happy in their ‘forever home’. Once your

property has been enrolled and tenanted initially, the NDIS has allowances for vacancy payments (NDIS SDA portion only). The amounts covered are for up to 60 days for properties with 2 or 3 participant rooms, and for up to 90 days
for properties with 4 or 5 participant rooms.

A SDA home must be managed by a property manager that is registered SDA service provider under the NDIS. There are very strict practices that must be adhered to when working with people in the disability sector and only an authorised SDA provider can manage your property. The properties are leased directly to the

participant so that SIL and other Service Providers can continue their high-care services without the organisation worrying about leasing or property management requirements.

With a non-SDA Home, you work with a Local Real Estate Agent to help find you a suitable tenant. You sign a lease management agreement with the Agent so they can then find a tenant and then sign a lease agreement with the Tenant on your behalf. With a SDA property it is slightly different. A SDA Provider will hold a Head Lease, which enables them to sublet the property to suitable SDA approved Participants (tenants).

It would be unlikely that a complete furniture package would be required, as most Tenants would have their own furniture for their bedrooms, but we would suggest there might be some furniture required for the shared spaces. Each home would have different requirements, but we believe allowing around $10,000 - $15,000 for items like a fridge, washing machine, table and chairs and lounge would be wise.

It is generally understood that Tenant’s will look after their own maintenance of the home and gardens (generally this would be part of their daily living funding, managed by their SIL provider). The

landlord is responsible for all other normal maintenance as per any other investment property. The Tenants would be responsible for damage caused to the property.

The Tenants are responsible, but it is advised that the Landlord connects utilities such as NBN and electricity in their own name and bill the ongoing costs back to the Tenant’s, as it will be hard to get

connections made to the home with 3 or 4 separate tenants.

Unlike a non-SDA style home, there are many factors at play when looking for and securing an NDIS-SDA approved Tenant. Location of the Property, suitability of the style of property in that area, demand for that style of home with a suitable tenant and current Government “red tape” are just some of the factors come into play. The process of looking for a Tenant starts before the build has even started. We work closely with Service Providers, most of whom have Participants on file, but there can be many factors that can delay this process also, as they may not yet have SDA funding approval on their Care Plans, or they may need to move out of current accommodation which may take time to transition across. There are still some challenges with the current NDIS structure and speed of delivery, but we are doing our best to push as hard as we can to get

a tenant in every one of our homes.

Perhaps, but there are no guarantees. With careful planning and working with an efficient provider, and the vetting in advance of potential participants, one would hope that tenants will be ready to move in on completion of the new home. However, there is no guarantee that this will always happen on day one, and one must assume a period of time between house completion and transition to bring the participants into accommodation. This all depends on the area chosen and the number of participants in the waiting list.

Leases between the SDA provider and the participant are normally for 2 years. These new homes are very sought after as many disabled people are currently living in less desirable accommodation like nursing homes, hospitals or low standard living accommodation so are likely to stay for an extended period. The lease is extended based on all participants living happily together. It is up to the SIL to ensure all tenants are happy and if not, move participants in or out to provide the best outcome for the participant and the household.

A separate lease agreement is signed with each tenant, and these are usually for a 2-year lease

Currently there is a bond payable when letting a SDA property, although different jurisdictions may not have yet incorporated specific legislation surrounding SDA with the RTA. With multiple tenants, at present, all are handled under a rooming accommodations agreement where all are charged separately per room and not as part of a single lease arrangement. The bond fee will be the equivalent to four weeks rent for each participant per room (which is the participant contribution amount only, the NDIS payment is not factored for bond calculation).

Each of the homes that NPA offers for sale are modelled to improve the comfort and privacy of both Carers and Participants, whilst improving safety and functionality within the home. This allows Service Providers to better support and care for their Participants,whilst ensuring the comfort and convenience of team members who deliver the services and care. This also ensure that the cost of delivering the supports to the tenants is reduced as the home has been designed to facilitate this.

Most of the time, yes. NPA provides tailored accommodation solutions that are unique to each Participants disability and care requirements. We emphasize the word “most” because one must remember that the Participant isn’t going to sign a “lifelong lease”and that they may (although it is unlikely) move on to another

property or location after their lease ends, like any rental property. The number of participants or types of participants that will live in the home depends on future needs of future participants, which may

change.

NDIS homes are built to a very high standard. They do not present as a hostel or overcrowded old style disability housing. These homes are built and designed to look like a regular home from the outside, but inside are designed to accommodate, and last by providing the

tenant with all the features they need and want in a permanent home, whilst providing a safe, comfortable and convenient workplace for caregivers.

Yes, if you wish, your property can be easily used as a standard home.

A Family Trust is worth considering for holding this type of investment due to its tax benefits, but we suggest you speak to your Accountant or Financial Advisor for advice. We can refer you to a planner, accountant, or broker to assist.

Whilst some of the major lenders may consider NDIS loans, this generally creates complications when it comes to valuations and they are not likely to lend more than 50%.

There are limited lenders who do understand the NDIS product and provide up to 90% loans (80% if within an SMSF) and can facilitate the loan process so that it is relatively smooth and valuation issues are less likely as they use valuers who understand how the SDA income can work. To ensure you are likely to be approved for an NDIS loan ensure the

following:

• A buffer of at least $100k over and above the deposit
• A good credit history
• Exceptional credit score
• Stable employment with good income
• Build a house that has an adaptable design to accommodate people with different disabilities

Borrowing to build a Specialist Disability House is available up to 90%, however, such loans will attract a high LMI, but assume 80% LVR as the norm.

It is imperative that you allow a significant buffer amount over and above the deposit amount as an SDA property investment requires additional payments over and above the cost of the property for things like Provider Engagement, Participant Procurement and Furniture packages.

Additionally, it is prudent to allow for loan repayment costs for an initial vacancy period of at least 6 months as payments from the NDIA can be slow to start flowing.

Often we are asked about capital growth; it is our logic that the property will attain land value and should achieve similar growth as per other homes around it. Aside from wider passageways, and

doorways and other features, it is very easy to turn the dwelling into one that any family could comfortably live it. Based on this logic, we are of the opinion (opinion only) that your SDA property will escalate

in value and achieve capital growth during the life of the investment. If the location achieves say an average of 3% per annum, there is no logical reason why your SDA home should not achieve a similar growth or the same growth.

Yes, upfront it costs more to build and taking this into consideration, especially if sold as a SDA dwelling, your investment should hold its value. After 10 years it should have achieved capital growth,

however investing in a SDA property is investing for very high rental yields and secondary is the bonus of capital appreciation.

The investor can sell the property as per standard Real Estate legislation requirements. The investor also has the option to roll over their agreement and continue the NDIS as existing NDIS stock once the 20-year period is up. Otherwise, to convert the home to a normal home would probably cost around $10,000 in today’s prices for a wheelchair-friendly home (Fully Accessible and High Physical

Support SDA design standard). If you have built a home to the Improved Liveability or Robust design standards, you would likely not need to make any renovations or refurbishments as the home will present as a regular property.

Yes, you can, but if borrowing only as a single contract. This would normally mean you would need to purchase the property in cash from your SMSF. Only single contract purchases can be purchased in a SMSF, not a two-part contract purchase.

Two-part contracts are very common when purchasing house and land packages. Buyers usually sign a contract with the land developer for the land component, and then a separate contract with the builder for the build component. Buyers are required to settle on the land portion, and then pay ‘progress payments’ during construction. Progress payments are essentially a ‘drip feed’ of payments made to the builder over the course of construction to fund the works (eg: materials and labour). At key milestones along the way (eg: slab, frame, lock-up), buyers will be required to make payments based on the predetermined percentages of the build contract price. One-part contracts are more common when purchasing apartments, villas and townhouses. Buyers sign a single contract, covering both the land and building component. A deposit is paid upon contract signing, and then the balance of the property price is paid at settlement.

SMSF investments in NDIS is a hot topic. We are getting a lot of buyers with large amounts in super exploring the idea of NDIS. Yes we can assist. We can refer clients to a third party facilitator who will do a one-part contract for House & Land packages that can then be sold to the SMSF at completion as a single contract. SMSF investors will need to have between

30% and 35% of the single contract price, which includes additional costs such as stamp duty and holding costs etc. This would amount to over $350,000 as an SMSF balance minimum, ideally at least $400,000, plus an additional buffer amount for specific SDA upfront costs. Please consult your accountant for further advice as we are not financial advisors.