Aussie retirees helping to solve the NDIS accommodation crisis

Through National Disability Insurance Scheme (NDIS) housing investment, an outpouring of investors are seizing the opportunity to help tens of thousands of Australians desperately in need of supported independent living accommodation (SIL). SIL is in strong demand from Australians living with disability who require accommodation with NDIS supports. Typically, most SIL accommodation includes a home set up appropriately with rooms for NDIS participants to live in and separate space for a full-time carer and house manager.

“Self-managed super funds (SMSFs) are investing in properties all over the country and leasing them out as NDIS accommodation to help solve the accommodation shortfall for people that need supported independent living. When you think of NDIS property investment, think of it as your socialminded, ethical investment choice with low risk and high returns,” SMSF Loan Experts founder, Yannick Leko said.

“With returns that double for SMSFs compared to normal investment property returns, we’re seeing a huge trend in SMSFs borrowing funds to purchase properties for NDIS housing.

“Using your super to buy property gives you access to some of the best tax incentives for investing in property. With a correctly optimised loan, SMSF structure and property type, your fund could be hundreds of thousands of dollars larger when you retire.”   According to Leko, the NDIS is a government initiative formed in 2013 to fund costs associated with disability. This government funding helps to improve the quality of life of participants, their families and carers, especially through the NDIS property investment scheme.

“The undersupply of specialist accommodation for Australian’s living with disability is catastrophic — many people with disability are living in aged care facilities simply because there aren’t enough houses available to suit their needs,” Leko said.

“We urgently need more specialist houses built in Australia, and the Speciality Disability Accommodation (SDA) funding under the NDIS aims to do just that. In 2016 the SDA was established to provide vital funding for custom homes that meet the needs of Australians living with disability.

“The Government has sought to remedy the high demand and low supply for specialist housing by providing incentives to investors. This generous funding allows Australians approved under the NDIS to become your tenants — bringing with them a wealth of benefits.”

According to Leko, having NDIS participants as your tenant comes with a multitude of additional benefits, including:

• The drastic undersupply of housing means you’ll never need to worry about your house sitting vacant.

• Having qualified participants as your tenants in your NDIS investment property comes with a multitude of additional benefits over having tenants who aren’t funded by the Australian government.

• Investing in SDA property means you get riskmitigated NDIS investment properties that are government-backed.

• The NDIS property investment will let you receive above-market rates, realising incredibly high yields of up to 18 percent thanks to government funding.

• Your rental income is pegged alongside CPI, so your income stream from your NDIS housing investment will rise with inflation.

“Investing in SDA property provides peace of mind and a sense of certainty that non-government-funded investments simply cannot offer. A potential yield of this calibre with relatively very low risk is not easily come by,”

According to Leko, the NDIS funding for SDA property provides excellent benefits to people with disability and investors alike, however there are a few barriers that investors must first answer to get through to take advantage of this incredible NDIS housing investment opportunity.

• The number of lenders willing to provide finance for NDIS property is low.

• It is not possible to get a lender’s mortgage insurance on an SDA property. As a result, lenders will only offer up to 80 percent of the value of the property.

• The NDIS investment properties, as custommade homes, are often valued lower than the contract price simply because there are no comparable sales in the area.

• When determining your capacity to repay the loan, the lender uses the market-value rent, which is a lot lower than the actual amount received.

The rental income you receive from your NDIS investment property will be much higher than the market rate, but at this stage, the lenders don’t have a method of assessing this factor and for that reason your mortgage application could be rejected purely because lenders haven’t updated their lending criteria to consider the NDIS investing initiative.

“The benefits for investors and people living with disability are incredible and unrivalled. There is clear reasoning why there is a surge in SMSFs investing in NDIS property and overcoming lending barriers,” Leko said.

Since they began 12 years ago, SMSF Loan Experts has filled the growing market demand for lending experts who specialise in SMSF. Today, its team now combines years of experience through every aspect of self-managed super funds. The SMSF Loan Expert difference is that the team specialises in SMSF lending, unlike other lenders. They pride themselves on organising more limited recourse borrowing arrangements in a week than most other brokers or bank branches in a year. https://smsfloanexperts.com.au

All articles are general in nature. Individuals should seek expert advice before acting on any information contained in Active Retirees.