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A Beginner’s Guide to National Disability Insurance Scheme (NDIS) Real Estate Investing

There are so many new investing opportunities coming into the forefront these days. Most recently has been the rise of cryptocurrencies in the United States and around the world. These new forms of investing give investors a chance to diversify their portfolio. In the end, that is a good thing.  It spreads their money around so that one bad investment won’t ruin their financial life.

But what if your investment also went a long way in helping someone in need? What if you could make money but also help people at the same time? Well, one unique form of investing in this way has popped up in recent years in Australia.

It is known as the National Disability Insurance Scheme (NDIS). NDIS is an innovative initiative by the Federal Government to provide better housing for disabled tenants (who are themselves known as NDIS participants). With this program, investors can earn up to 16% of gross rental income. You receive the chance at long-term rental returns together with the potential growth of your property value. 

So what is this all about? Here is a beginner’s guide to understanding the National Disability Insurance Scheme (NDIS) real estate investing. 

What is NDIS?

The National Disability Scheme (NDIS) is a Federal Act developed in 2016 to enable Australians with disabilities to control matters that affect them. One of these issues relates to housing. This Federal Act aims at helping 28,000 Australians living with disabilities to move into affordable housing called the Special Disability Accommodation (SDA).

Why was this program developed? NDIS introduced SDA to help build new, accessible, and affordable housing for Australians living with disabilities. As part of the SDA plan, private and corporate investors can now participate in the SDA market. This plan brings growth in the number of specialist houses developed and built across the country.

NDIS Property Investment

Currently, there is a shortage of high-dependency accommodation in Australia. This is especially true for young people. As such, the involvement of private investors is essential to speed up the rate at which the government can meet the urgency of new housing requirements.

For approved properties developed to provide better housing for those living with disabilities, the Australian Government will pay NDIS participants’ rent for 20 years and provide more than 10% of the rental yields to investors. The Federal Act is expected to make it easier for NDIS participants to access the kind of housing they require. At the same time, it will boost investor confidence by providing rental income.

Related Content: 5 Common Rental Real Estate Mistakes Landlords Will Make

How Does NDIS Property Investment Work?

For a property to become available to NDIS participants, it must be enrolled and compliant according to SDA rules. Participants must also be registered as an SDA provider. The NDIA (National Disability Agency, will then connect participants with investors who provide the dwelling.

As such, the provider is not funded directly from the NDIS but through the NDIS participant who has an approved accommodation budget. This means that the NDIS participant will negotiate the rent directly with the housing provider. As in any rental market, the SDA payments received by the participant will depend on the size of the dwelling, location, and accessibility it provides.

Related Content: The Fastest Things You Can Do to Improve Your Home’s Value

The payments will also cover the construction cost, thus offering a return on investment (ROI) at a market rate of above 10%.

NDIS Investment Loan

Some Australian banks have made it easy to access NDIS investment loans. Besides providing loans to participants, banks are also offering investment loans to any interested investor.

Since the Government has guaranteed a 20-year repayment, banks are willing to lend to investors who come with a 20% deposit. The only thing you have to do is to find the right lender. There are places for you to check out NDIS SMSF loans to find out if you qualify for this amazing opportunity.

In the end, it seems like a win-win situation. Your investment with the NDIS can go a long way in ensuring Australians living with disabilities get a forever home. In return, you will receive high investment returns with the help of NDIS.

Leave a Comment or Answer a Question Below: What do you think about this program? Is it something you would invest in? Have you ever focused on investing in something that also helps someone with a problem they may be facing? 

Photo courtesy of Binyamin Mellish from Pexels

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