The benefits of investing in NDIS housing

Aligned Disability Investments is a property fund manager engaged in building Specialist Disability Accommodation (SDA) housing for disabled Australians under the National Disability Insurance Scheme (NDIS).

Aligned Disability Investments CEO, Arthur Naoumidis says, “It is important to distinguish the physical elements of SDA housing from the NDIS service industry that provides for the wellbeing of disabled people. The two aspects are quite different.”

In the Aligned Disability Property Fund (ADP Fund), like most property trusts, money is pooled and leveraged to acquire sites and begin construction. Once completed, properties are assigned to a Specialist Disability Accommodation (SDA) property manager to manage. The property manager seeks tenants from a waiting list of NDIS registered and approved participants.  As of March 2023, there were around 1,350 people on the waiting list. Additionally, there are many other existing SDA tenants that are currently in older accommodation that is not fit for purpose and for whom a move to our newer SDA housing would be attractive.

There are 4.3 million Australians living with a disability and the NDIS currently funds over 554,000 which is estimated to grow to 741,000 by 2026. Specialist housing is needed for a range of people with extreme functional impairment or high needs who fall into 1 or more of 4 category needs: improved liveability, robust construction, full accessibility and high physical support.

SDA property managers provide the physical property maintenance, collect and disperse rent on behalf of the NDIS participants paying this to the ADP Fund, who in turn pays the unit holders in the Fund.

Financing these developments is critical to providing ongoing accommodation to the many disabled Australians currently seeking SDA dwellings. The government provides rental payment/subsidies ranging from around $50k to $95K per year per NDIS participant depending on the SDA housing category. These attractive rental payments are the Government’s way of incentivising the investor community to build SDA housing as it is much cheaper than the alternatives such as aged care or hospitalisation.

“Our properties are newly developed to the latest NDIS standards and deliver quality accommodation that will meet the needs of the NDIS participants who will have their own 1-bedroom apartment – they do not have to share, which reduces the risk of abuse from other tenants”, says Mr. Naoumidis

As the ADP Fund ensures that our SDA accommodation is separate to the recipient’s service provider, the tenant can switch NDIS service providers without risk to their accommodation if they or their families are not happy with the service they are getting.

Most media reports of fraud, rorting and abusive practices relate to the delivery of services and generally have nothing to do with the development and provision of new homes for the disabled.

With an estimated ongoing 12% rental yield, investors can make attractive development returns and ongoing rental income whilst delivering much needed disability accommodation.

The ADP Fund only builds in the metropolitan area to give participants the ability to choose where they want to live to be close to family and other support networks. This is also where most Australian’s live, so it makes sense to build the SDA housing where it is needed.

The ADP Fund is using a hybrid development strategy that combines residential apartments with specially fitted out disabled apartments.  This allows the high cost of land in metropolitan areas to be spread between the SDA and the standard residential components. This reduced land component allocated to the SDA component is what allows the ADP Fund to target a 12% rental yield.

The residential apartments in the development are sold off-the-plan with any profits going to the investors. Investors will be able to either reinvest the capital returned from the residential sale or redeem it.

The ultimate goal for SDA properties is to package them for eventual sale to financial institutions such as industry super funds with the proceeds rolled over to continue with new developments as the number of disabled people needing specialist accommodation continues to grow.

Contact:

Arthur Naoumidis
CEO, Aligned Disability Investments
arthur@aligneddisabilityinvestment.com.au
0411 958 084

Disclaimer: The material in this document has been prepared by Aligned Disability Investments Pty Ltd (ADIPL) ACN 663 744 143 AFSL 519447AFS Representative 1301975. This presentation is only by way of general background information about ADIPL activities. The information given is in summary form and ADIPL does not warrant the accuracy, currency or completeness of any information contained in the document. The material in this document, is not intended and should not be considered as constituting advice, a recommendation or an offer or solicitation to investors, or potential investors, in relation to purchasing or acquiring any securities or other financial products and does not take into account your personal investment objectives, financial situation or needs. If you are considering making an investment and before acting upon any information in this document, you should consider the suitability of this investment, having regard to your personal investment objectives, financial situation or needs and that you should seek independent financial advice. Forward looking statements may be contained in this document, including but not limited to statements regarding ADIPL belief or expectations in respect of its business, market conditions, results of financial operations and risk strategies. ADIPL has taken due care in preparing this information, however actual results may differ substantially in either a positive or negative way. Hypothetical examples and forecasts are subject to factors outside of ADIPL control. Past performance is not a reliable indication of future performance. Any potential investors or investors are warned not to place reliance on such statements but to proceed to make an investment decision based on their own independent research.