Finding a suitable home when you’re an Australian with a disability has been a perpetually uphill battle. Purchasing a home with the appropriate fit-outs — such as Assisted living technology, height appropriate benches and windows, safe wet areas, hoists, and features for people requiring high physical support, to name a few — is unaffordable due to the extra expenses necessary to build or buy a home that suits their needs. The unaffordability of appropriate disability housing is further compounded for these Australians when their disability limits employment opportunities.
Living on an Australian Government disability pension doesn’t come close to providing the finances needed to support the homeownership dream. Further, renting an appropriate home is not feasible because of the drastic undersupply of suitable dwellings.
The Australian Federal Government has come up with a solution to end the housing undersupply for people with disabilities. That solution comes in the form of National Disability Insurance Scheme (NDIS) funding for Specialist Disability Accommodation (SDA). The monetary incentive is funded by the NDIS and paid to investors to stimulate the expansion of suitable homes for people living with disabilities.
The incentives are paid via much higher than normal rental income (SDA payments) guaranteed for 20 years while the homes are SDA approved. After this point, the rental income will continue to be higher than market rates. Investors receive SDA payments under the NDIS and the reasonable rent contribution paid by the tenant.
Committing to building an SDA property investment will generally require a deposit of about $150-200,000 in cash or equity in another property. But what happens if you don’t quite have the funds available to invest in building an SDA property? That’s where Kevin Nolan’s Disability Homes Investments High Yielding Growth Fund comes into play.
Benefits of Disability Homes Investments High Yielding Growth Fund
Affordable Entry to NDIS SDA property
Nolan’s fund provides affordable entry for wholesale investors looking for a high yielding, high capital growth investment. With the minimum investment sitting at $100,000, investors are offered an easy entry point when looking to allocate a lower portion of their portfolio to NDIS property.
A Done-for-You Solution
When investing in this fund, you get to reap the benefits of NDIS investment properties without worrying about any of the processes. There are no big decisions regarding the design and building of the property, the location, finding tenants, or dealing with an SDA Provider.
This is all taken care of for you. You simply get to enjoy the benefits that come with being invested in a high yielding, high capital growth fund!
Ethical Investment
People are becoming increasingly conscious of investing in areas that will make a positive environmental or social impact and are actively seeking an appropriate investment opportunity. Investing in NDIS property helps house a vulnerable portion of the community — many of which are stuck in hospital and aged-care facilities purely because there are no suitable housing options for them. SDA housing helps improve the lives of Australian’s with disability and is a positive way to give back to the community.
High Rental Yields
Because the government is funding SDA properties, you have the opportunity to earn net yields growing from 10 to 20% over time. As well as high yields, you get extra risk mitigation due to it being government-backed.
Location & Occupancy Risk Mitigation
The high yielding growth fund invests in NDIS properties in prime Brisbane Locations — next to train stations, parks, medical facilities & shopping districts. These prime locations make the homes more appropriate (and popular) for NDIS participants.
Owning multiple dwellings across various prime locations mitigates vacancy risk for investors.
Disability Homes Investments High Yielding Growth Fund Investment Strategy
Through the development of NDIS investment property, the fund houses NDIS participants. The dwellings are considered SDA homes for 20 years, after which point they’ll still be eligible to accommodate people with disability at a higher than market rental income.
Choosing tenants who receive long-term NDIS SDA funding means the houses will have highly secure tenants over a long period — this helps reduce vacancy risk further.
The strategy is broken up into four phases:
- 1. Land Acquisition and Development Phase: Investors receive a 5% fixed return during this period.
- 2. Operational Phase: Once the homes are built with tenants happily living in them, investors receive a 10-12% net return.
- 3. Valuation Phase: The properties are valued substantially higher commercial values than the cost of development. This means there is a considerable appreciation of value available to leverage by releasing this capital growth.
- 4. Leveraging Phase: Releasing the capital growth provides an opportunity to reinvest to increase the asset base. The target returns after this phase grow to 15-20% per annum net yield and increased asset value once the new assets are delivered & tenanted.
How to invest in an NDIS property investment fund
At SMSF Loan Experts, we provide the perfect finance solution for anyone looking to build an NDIS property to invest in SDA. At this stage, we are unable to provide loans to access this disability homes fund. But that doesn’t mean we can’t help you access finance if you’d like to add this asset class to your portfolio.
If you have equity built up in your home or a directly held investment property, we can help you release that equity by refinancing. If you’d like to release $100,000 (or more) of equity to allocate to this ethical investment, we can help. By refinancing, you not only get to release equity, but you have the opportunity to switch to a mortgage that better suits your needs.
Whether you’re interested in the high returns or ethical nature, SDA property is growing in popularity among SMSFs looking to gain exposure to this asset class.
For more information on Kevin Nolan’s NDIS Property Development fund or approved SDA housing, please visit https://disabilityhomes.net.au/fund/
