NDIS Property Investing

19/10/2024

So, NDIS loan done through private lenders?
No, not through private lender. Rather it is done through non-bank lenders. Non-bank lenders have to comply with the same rules and regulation that CBA, NAB, ANZ etc are required to comply for lending purpose.

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19/10/2024

Is interest rate mush higher for NDIS loan?
No, not necessarily.

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19/10/2024

I have heard none of major banks do NDIS Loan, from where can I get my NDIS Loan?
Yes, you are right most major lenders do not NDIS loan, but there are plenty of non-bank lenders, who can do NDIS loan.
So, reach out to us - we have highly skilled and trained NDIS loan brokers who can make your loan journey smooth and hassle free. This is absolute free of cost to you.

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19/10/2024

Why do major banks do not do NIS Loan?
Something that you need to ask them, but our understanding is that the SDA/NDIS property market is not big enough for them to change their current credit policy and other processes. Major banks have dominance in normal residential market, and they are comfortable operating in that space.
Changing current credit policy and other processes, training their staff is a huge risk for their operation, whilst SDA property market does even represent 1% of the loan market size.

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19/10/2024

I have a banking relationship with one of major bank, can I get a loan from them?
Most major lenders do not NDIS loan. Some major banks, who do NDIS loan, will make your life so miserable that you will end up not proceeding with them. So, better to assume none of the major banks will do NDIS loan.

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19/10/2024

My friend told me generally there is a valuation shortfall with SDA property, is this correct?
There can be a valuation shortfall, if residential valuation is ordered. But we use commercial valuation, ensuring valuation is always on the spot or higher than purchase price. We never had any issues with valuation coming lower.
Typical cost of NDIS commercial valuation ranges from $2500 to $3500 depending on location. Some remote area valuation fee may be as high as $4500.

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19/10/2024

Why is valuation fee so high for NDIS loan?
Although SDA property is a residential property, due to its high rental cashflow nature, we order commercial valuation, hence valuation cost is high. Yes, we can order residential valuation but this will create two issues – valuation shortfall meaning you will need larder deposit and NDIS rental income cannot be used for loan serviceability meaning your loan may not pass.

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19/10/2024

What are typical fees and costs associated with NDIS Loan?
One of the biggest costs associated with NDIS loan is valuation fee, which changes from $2500 to $3500 depending on location. Some remote area valuation fee may be as high as $4500.
Other than this, lender’s application fee, legal fee, settlement and other fees may add up to $2000.

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19/10/2024

What is total SDA budget under NDIS funding?
According to NDIS, $770 million budget has been allocated for SDA rental payment per year.
As of June 2024, only $316 million were paid in SDA rental payments. Only around 40% of allocated budget gets used last year so far, this also highlights under supply of SDA properties.

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19/10/2024

Which SDA category house should I invest?
We suggest investing only in High Physical Support (HPS) for 4 reasons:
- Rental payments are higher than other SDA categories
- It covers 90% of eligible participants market
- Improve Liveability and Fully Accessible participants can be accommodated under HPS house
- Chance of your SDA being damaged is very slim.

Robust is standalone category, and only represents only 8 to 12% of eligible participants market. Chance of getting more than one participant is very rare. Even at times, it can be difficult to keep one tenant that your SDA provider may have sourced. Also, very high chance of property getting damages.
So, if you purely doing SDA investing for money, then Robust class may not be that appropriate. But make up your own mind and do research.

19/10/2024

Is demand for SDA properties like to grow in future?
Yes, absolutely. See below projected SDA demand by 2042 for eligible participants.

19/10/2024

What are the rental returns on an SDA House?
Rental returns on an SDA house are made of two components and from one SDA house you can generate $150K to $250K gross rental income per year.
- SDA payment
- Maximum Reasonable Rent Contribution (MRRC)
For up-to-date SDA figures reference the following directly from the NDIS:

The NDIS Pricing Arrangements for Specialist Disability Accommodation (previously the Price Guide for Specialist Disability Accommodation) is a summary of price limits and other pricing arrangements that apply to SDA under the NDIS.