Earn up to 14% Rental Income (Gross)
Underwritten by the Federal Government
Sounds too good to be true?
Welcome to an innovative initiative by the federal government to provide first class housing for disabled tenants via the national disability insurance scheme (NDIS)
Here is a powerful tool for investors seeking high long term rental yields combined with attractive growth potential… A winning combination!
EXAMPLE OF A PURPOSE BUILT NDIS APPROVED HOME
What is the NDIS?
The NDIS is a new way of providing support to Australians with a disability, their families and Carers.
The NDIS is a Bi-Partisan Federal Government Agreement which is designed to run from inception for 20 years with a current budget of $26 Billion per year funded through the Medicare Levy. With the possibility of extending this agreement beyond the initial 20 year period.
The NDIS was rolled out in 2016 to help assist the 14% (approx. 4.3 Million) Australians who have a disability.
SDA (Specialist Disability Accommodation) is a NDIS introduced funding stream to build new, accessible and affordable housing for Australians living with a disability.
In essence, the NDIS makes pre-calculated payments to those Providers (Investors who purchase a NDIS Approved Home) in order to cover the costs incurred to the Investor with the potential of providing Returns on Investment (ROI) of over 4 – 5 times higher than an average investment property…. HENCE THE ATTRACTION OF THIS GOVERNMENT SPONSORED INVESTMENT MODELLING TO INVESTORS.
Your income is received in 3 seperate payments
- The Reasonable Rent Contribution which is based on 25% of the Recipients Disability Support Pension.
- SDA (Specialist Disability Accommodation) Accommodation Payment.
- Commonwealth Rent Assist.
Rental Incomes to the Investor range from $84,000 p.a. ($1615 per week) – $130,000 p.a. ($2500 per week) based on location, the number of tenants and the type of accommodation provided.
A typical SDA Home is normally 3 – 4 Bedrooms housing 2 – 3 Disabled People and a Carer (paid for by the NDIS).
A salient point is that these SDA Homes from the outside look just like any other Non-NDIS Home. But inside the interiors have been specifically designed to cater for the specialist needs of a disabled person to enable them to live a normal life independently (and not having to live their lives, for example, in an institutionalised nursing home). And for younger people the opportunity to live with others of their own age and still receive the care and support they need.
It is also important to note that SDA Homes are brand new and are generally built within a regular Owner Occupier Development (for example a 40 Home Estate) with perhaps just 2 -3 of the homes being a SDA Home within the Estate. So in other words, in general, SDA Homes become part of a typical new Estate Development and are not built within a “cluster” of NDIS homes.
Here is a recent example (as per the above Picture)
- A 4 Bedroom Home (Robust Design) designed for 2 NDIS Tenants + 1 Carer + 1 Breakout Room
- The combined House & Land Package all up price = $680,000.
- The income on the above property based on 2 NDIS Tenants = $89,280 per annum (Gross) = $1717 per week (Gross)
- Based on this example, the investor will receive a Gross Return of 13.12% Per Annum.
- Please note that the above rental income is a Gross Figure out of which all the normal outgoings associated with any standard investment property will apply (including Property Management Fees, Council & Water Rates etc).
SMSF Investors
If you have a Self Managed Super Fund (or thinking of setting one up) a NDIS approved SDA Home with its exceptionally high yields combined with long term lease back potential is an attractive SMSF investment proposition.
Purchasers wishing to Negatively Gear outside of Super
For those Investors who qualify from an assets and income perspective, there are specially designed NDIS SDA Home Lending Packages.
Approved Purchasers are able to borrow at an 80% LVR and at normal residential interest rates (which at the moment are at historically low levels) with exactly the same lending requirements as a standard Non-NDIS investment property.
Hence the Investor who wishes to Negatively Gear may very well find themselves substantially Cash Flow Positive.
Flexible Options
Depending on the Accredited NDIS Management Team, a Standard Tenancy Agreement normally runs for 24 months and can be rolled over at each 2 year expiration without cost to The Landlord (Investor).
In this case, The Landlord (Investor) does have the flexibility at the end of each 24 month period to “opt out” of this NDIS arrangement and sell their Investment Property on the open market without penalty or rent it out on a Non-NDIS basis.
But with the Investor receiving such high rental income, the incentive is for The Landlord to keep rolling over the lease to the NDIS on an ad infinitum basis.
It should also be noted that like any other investment property, rentals are not guaranteed and depend on occupancy levels. However past experience and research indicates that most NDIS Tenants want to “stay for life” when they are in appropriate independent accommodation – and that is why these SDA Homes are referred to as their “Forever Homes.”
Sourcing a NDIS Approved Tenant
You are at liberty to choose any Accredited NDIS Property Management Team to source NDIS approved Tenants for you and to look after your NDIS property on an ongoing basis.
Please refer below to an example of an Accredited NDIS Property Management Team – SDA Manage Australia.
SDA Manage Australia (SDAMA) is a specialist Property Management Firm that works with NDIS Service Providers to source NDIS Approved Tenants and place them in suitable SDA (Specialist Disability Accommodation) Homes.
SDA Manage Australia (SDAMA) will also take care of ensuring your rentals are paid at the due time and also manage your property in all aspects of appropriate property management and maintenance…and also take care of all on-going Compliance Ordinances on your behalf.
Hence the idea is that it becomes a “Set & Forget” investment for each Investor (either via a SMSF or for Non-Super Investors) and let SDA Manage Australia (SDAMA) look after everything on your behalf.
SDA Manage Australia (SDAMA) Fees include:-
No 1:- An Enrolment Fee of $3,000 + GST. Once your home is completed, SDA Manage Australia will work with NDIS qualified Certifiers to gather all the information required to have your property correctly enrolled and registered with the NDIS.
No 2:- SDA Manage Australia charges a “Tenant Sourcing Fee” of $5,000 + GST for each NDIS approved tenant placed in your NDIS Home.
Payment for the Tenant Sourcing Fee is only payable on successful placement of each tenant once their lease is signed.
No 3:- SDA Manage Australia charges a Property Management Fee of 10% + GST per annum to:-
A) Collect your due rentals and forward them onto you at the end of each Calendar Month.
B) Manage your NDIS property in all aspects of property management and maintenance.
C) Ensure that your property is compliant with the myriad of on-going NDIS Rules and Regulations associated with your NDIS property.
You are welcome to engage any NDIS approved property manager of your choice – but you will find that SDA Manage Australia’s fees are competitive within the marketplace.
FOR LATEST LISTINGS PLEASE CALL MAURICE WATSON ON 1800 770 114
For our NSW, Interstate and Overseas clients we offer a fully comprehensive in-house service to assist you with putting the whole NDIS Investment Package together – either within a SMSF framework or outside of Super – including sourcing suitable NDIS Tenants, helping you to source NDIS Lending Packages, conveyancing using a Solicitor fully conversant with NDIS Contracts, referring you to a specialist NDIS Accountant who can set up a Family Trust (for an overall cost of $1990) to minimise tax payable on your rental income and assist you with claiming your Tax Deduction Entitlements.
We find that these days most people are time poor so we offer a One Stop Investment Property Service. We do not charge any fees to put everything together for you and to monitor the processes – we get remunerated directly from the Developer/Vendor (not from you).
You are welcome to avail yourself of our obligation free holding deposit mechanism. For those clients wishing to secure a NDIS Approved Property without obligation all we require is an EFT of $1,000 which is held in trust for you by the vendor’s solicitors (100% fully refundable if you do not proceed with your purchase for any reason).
Now is the time to purchase with interest rates still at historically low levels.
With banks typically offering only around 3% (or less) to Deposit Holders the Gross Yield from a NDIS SDA Property is exceptionally appealing at between 12.00% – 14.00% (Gross) … combined with the potential for attractive Capital Appreciation….a Winning Combination.
Whereas in effect your money is depreciating alarmingly in value just sitting in a bank account.
If this NDIS Investment opportunity is of interest, please respond back to us ASAP – since NDIS Approved Stock is strictly limited and is in great demand by Investors.
