Building new homes for the disability sector can be the gold mine property investors are looking for but be warned – with the high returns come some risks.
Homes within the Specialist Disability Accommodation (SDA) scheme can deliver yields of more than 11%, according to Danny Buxton of Triple Zero Property Group.
But such properties cost more to build and can experience periods of vacancy which may erode the otherwise good returns.
Buxton says there is strong demand for purpose-built homes for people with disabilities and current supply is low.
Research reveals the existing supply of SDA needs to grow by about 60% to house the people the National Disability Insurance Scheme (NDIS) expects to fund to the tune of $700 million every year.
Under the NDIS, people no longer have to be in shared living to access disability supports, they can choose where they want to live and who they want to live with.
“We have had a lot of people over the years ask us about NDIS housing,” Buxton says.
“It is an ultra-high yielding investment. There is a significant upside not just for clients but the community.”
The scheme “generously compensates” owners who specifically invest in compliant homes in an effort to dramatically increase the housing supply needed.
“The final returns can vary greatly, depending on the style and scale and accessibility of the dwelling,” Buxton says.