Be careful: NDIS Investing

We’ve been seeing a lot about NDIS housing in the news lately and as a property investor, you may be wondering if it’s something you should consider for your portfolio.

Many NDIS providers are advertising their housing options as government-backed schemes. Unfortunately, this is not the case and I wanted to share with you today some other things to look out for when weighing up your investment options.

Providing housing through the NDIS certainly could be profitable, not to mention the warm feeling of knowing you are helping people in need, but before you make any decisions, below are some facts about NDIS investing.

Payments for NDIS housing are made to the NDIS participant - not the property owner - so despite many advertisements out there, there's NO government-backed guarantee of tenancy.

In fact, given the smaller market size, some NDIS service providers say it can take 9-12 months to find a tenant, and vacancy rates are high - on average between 10-15%.

It's important to do your research because from the initial build, through to selling your investment, NDIS housing is a very different model.

KEY THINGS TO CONSIDER

From a building and investment point of view, the NDIS investment process is quite different from the standard property investing models you know and therefore needs to be considered carefully.  There are a few differences that new investors should know about before deciding if an NDIS property investment is right for you.

1. FINANCE
Firstly, some banks consider NDIS housing as commercial, which means they can charge higher interest rates and often only loan 70% of the total value, so a much larger deposit may be required.

2. THE BUILD
NDIS properties must be constructed to strict specifications.  People with disability require specialised accommodation with accessible features to help residents live more independently and have better access to the supports in their home.

There is a stringent process of compliance and approvals and this takes additional time, which needs to be included in the build plan as it is crucial these specifications are met for the future tenant.

3. PROPERTY MANAGEMENT
All completed NDIS properties must have an NDIS-approved, Specialist Disability Accommodation (SDA) accredited property manager.  NDIS investments cannot be managed by you or your usual property manager.  Also, an SDA-accredited property manager will usually charge a higher management fee, sometimes up to 15% of the rental turnover.

4. THE MARKET
The last point I wanted to share with you today is the challenge of finding correct information about the market for NDIS properties.  Not only is it difficult to gauge exact supply levels of this type of housing, both planned and completed, but it’s also hard to estimate future demand levels in specific areas.

It would be a shame to invest your time and money in building a beautiful new, fully approved, accessible home, only to find that after going through all the additional paperwork and compliance required, there was limited demand for that type of housing in your area.

There are lots of different investment ideas and models out there and it’s always best to talk to an expert before deciding which one is right for you.

If however, you’re interested in a more traditional property investment here in South East QLD, with a 5% guaranteed rental return, I can definitely help you. If you have any questions at all, please book your free consultation with the button below, or call me on 1800 088 437.

I look forward to hearing from you.

Don't wait to invest. Invest, then wait.