More and more property investors are seeking an asset with a low environmental impact that is good for the community and delivers good returns.
One type of property that can meet those criteria is Specialist Disability Accommodation (SDA). This style of property provides suitable living arrangements for Australians with a disability and, at the same time, achieves significantly higher returns than they would with standard rental properties.
Danny Buxton of Triple Zero Property joined Hotspotting founder Terry Ryder for a recent webinar during which they discussed the benefits and challenges of investing in Specialist Disability Accommodation (SDA)…
- What SDA housing is
- Why it costs more to build
- How it offers higher returns
- It’s not a standard investment
- Location is paramount
What SDA housing is
Specialist disability accommodation (SDA) is an initiative of the Federal Government through the National Disability Insurance Agency (NDIA).
It is a housing designed specifically for people with extreme functional impairment or very high support needs. The housing must have features which allow the residents to live more independently.
The government provides funding (to help pay rent) for participants, depending on the level of their disability. Houses need to be registered in the scheme and meet strict criteria.
There are four different levels of housing under the scheme:
- Improved livability
- Fully accessible
- Robust
- High physical support
Why it costs more to build
The homes cost more to build because they include technology and fittings above the standard of a regular home.
Depending on the level of disability, this can include wider doorways and lower kitchen benches for wheelchair users, hoists to get in and out of bed and extra technology to assist residents in their everyday lives.
Buxton says often, there are two participants in a home, so they require their own bathrooms and rooms for carers.
At Triple Zero Property, other inclusions must include solar panels, water tanks, and other energy efficiencies throughout the home.
Higher returns
“SDA housing has got some great uplift and great potential,” Buxton says, “because rents are indexed to CPI, and once registered, properties can remain in the scheme for 20 years”.
Buxton says SDA housing rental yields are among the highest in the residential market.
I have a client building an SDA property in the improved livability category, and while the construction costs are higher than a regular home it has a projected return of 16% plus,” Buxton says.
He says high physical support property rents can go even higher, although the cost of building them is substantially higher.
It’s not a standard investment.
SDA Housing is not the type of standard investment that any investor can research and get into on their own, according to Buxton.
He says it requires expert advice to ensure you meet all the criteria required for the housing and it is built in the right location.
It can also be difficult to obtain finance as valuations can come in below the higher costs of providing all the extra features in a home.
Buxton says investors need someone who specialises in SDA housing lending and understands the asset.
Location is paramount
“Like any property you buy, location is paramount,” Buxton says.
“People with a disability still want to live in places you and I want to live. There are key criteria like access to shops, medical facilities, parks, and recreational facilities. All participants living in these unique homes have easy access to community resources.
If you want to know more
If you want to explore SDA properties further, contact the team at Triple Zero Property using the contact form below.
This content is general information only. Your situation is specific and individual; as such, you should always consult a registered and qualified professional within the particular area of advice needed.
