Specialist Disability Accommodation

Cate Bell I think you are quite justified to be sceptical of some of the people involved in promoting their product. Not because it is a bad investment but because it is a money grab. Firstly explain to me what furniture the participants will need outside of what they will bring for their own specialised needs? They don't need many chairs or lounges, they will have their own purpose built furniture. The technology you are talking about is the way of the future anyway so this is not in excess of modern housing nowadays anyway.
Secondly explain to me how a mangement fee of $10,000 to 15,000/yr is justified.
Some of the build requirements for RPI are also excessive. Not all participants require hoists and 1200 wide doors are excessive.

I think some comments are designed to scare people from into thinking it is all too hard. Yes there is already some gouging but hopefully this will be kept to a minimum due to government oversight.

 

I agree, I worked in the health and community sector for over 30 years, too many people with their hands out and some of the properties I have seen are overpriced, in areas that are too difficult with a lack of services. I also agree with you about the requirements, I have two properties that would be excellent for people who do not have physical disabilities that require hoists and 1200 wide doors etc. Thanks for your comment, I am going to continue to do some more DD. I also thought that I might do the real estate course myself to manage the property. I already have an SDA provider who won't be charging any fees, as they say, they are already getting government funding.

 

In regards to management fees the people we deal with charge 5% plus GST management fee and an accounting firm charges .5%plus GST compliance fee. Now for so called Philanthropist why are they charging 10% and I bet that is plus GST.

 

The fees you are charged sound reasonable. It is always interesting when someone mentions the word philanthropist, it is usually followed by large fees, certainly not generous support.

 

I only noticed this post yesterday , so I’m at the earliest stage of DD , but as another person involved in health care , I thought I’d share my initial thoughts and get involved with the ongoing discussion .

I have an inherent distrust of “ schemes “ and so far this scepticism has kept me away from investments that have burnt some members of the forum . Having said that , I see much more justification for this scheme than others I have seen .

I’m wary of returns that seem to good to be true , however a short time spent reading show that are various complexities involved in this that probably make the returns justifiable .

The compliance will complicated at construction and for ongoing management .

The entry level , finance wise , will take it out of the reach of many investors . For the individual investor , it’s likely to be for more sophisticated investors or SMSF , or for people to invest in specialised funds . For us , I see it as something we might look at in our SMSF , but right now we’re maxed out in terms of serviceability . That’s going to turn around in personal terms over the next 1-2 years and , in reality that sounds like the time frame to get involved in one of these . I’d expect it to be a bit clearer who the good providers to be , and I think 1-2 years won’t be too late to get involved .

For an individual investor , the most important decision will be choosing a reliable provider , however as it’s a new industry , the provider won’t have much of a track record within THIS specific role . Anyone who has had an involvement with disability will be aware of the issues involving some new providers in terms of fees charged and reliability .

My parents have just moved into a nursing home and knowing how the system works , myself and my sisters were able to get a place for them fairly quickly . I’m a Dr , one of my sisters is a lawyer and the other is a semi retired senior public servant who had just conducted a review of the aged care services for the fed govt . We’re probably better equipped to navigate the system than anyone else around , but we found the system frustrating and hard to work with . The NDIS property system sounds complicated and will be a mine field for the unwary .

Just because someone is “ not for profit “ doesn’t mean they are . NPF’s are run for the bottom line in most cases and are subject to he usual abuses that can occur in any company .Disgraced former NSW RSL president charged with fraud

I have a personal dislike for NFP due to experiences with them in the past . The worst outcome I’ve seen for a work cover patient was for some one working for one of the major NFP . The patient was deaf and dumb , but was working full time , living independently in his on home . He had a very genuine claim , but three years later was bankrupt , and a large factor was the lack of support from his NFP . Personally I’d prefer to work with a provider who isnt a NFP .

RISKS..

The biggest “ risk “ as an investment will be that Dr’s work out how to cure para/quadriplegia . Hopefully that happens , but in reality I don’t see that happening in the next few years . There are many disabled who fall outside this grouping so there will still always be a demand for this type of accomodation , just maybe not the volume .

As a mitigating factor for this , I’d be wanting to maximise the specifications of the properties and I’m in with RPI on this . As someone who deals frequently with people in wheel chairs , the more space the better . A bathroom per client would be essential . I have a friend who has a colostomy . I didn’t know this until we invited him up to our weekender and he said he could only come if he had his own bathroom . We were able to do this , and he’s not in a wheel chair .

After a slow initial period I would expect some bigger players to move in and there could be some oversupply , so a well positioned , well spec’ed property would be essential as a defensive move .

Unlike most investment properties , which are only someone’s home for a while , the reality is , these tenants are going to be in there long term , so providing a very nice environment in a good location would be a good defensive move , outside the altruist motive of providing a nice environment to some one with a disability .

Cliff

 

Hi cate , check out my anecdote about NFP’s in my above post .

A close friend was the PA to the CEO of another major NFP . The pay was below average , because they were working for a “ good cause “ , but the same restrictions didn’t seem to apply to the CEO when he was travelling in terms of flight class and accomodation . They got disillusioned and ended up leaving as they felt they weren’t being looked after by the NFP.

Cliff

 

Yes, I am looking at this for my SMSF and I am semi-retired, so soon I will get the benefit of a decent income stream and I have a keen interest in this area- it won't be a set and forget investment. I already have a couple of houses with Government leases, so they have met strict guidelines and are compliant (different sector). Since these houses are in excellent locations close to CBD, health facilities, transport etc. I am thinking that maybe for these properties I could look at retro fitting them to the level of "robust". I also have a good piece of land with an old house, that one I might build a high physical support. I agree, I believe that there is time. I think the oversupply will be in outskirt areas with lack of transport and facilities, in good areas less than 20km from the CBD, I don't think that there will be too many vacancies. Many years ago I donated my time to a start-up NFP, the woman is in and out of court at the moment for misappropriation, never again. One only has to read NGO annual reports to see the waste.

 

I was going to explain it to you Richard but it's fairly clear you wouldn't believe me anyway given the position you've taken at the get go.

I absolutely wish it wasn't so hard. When this was first coming I hoped that it would be as simple as owning any investment property just with an LHA certification on top and there would be way too much stock built with able bodied people living in houses that you would hardly notice were accessible.

All I say is that the NDIS is user choice, when the market matures there should be a flight to quality. There is some rubbish being built by people who have obviously never spent time with the carers or participants. There is simply no need to build rubbish. Like anything, this can be done on the cheap or money can be wasted, just because the SDA payments are generous doesn't mean money should be wasted.

 

Hi Cate

The "Robust" properties I am aware of have perspex for glass, MDF walls and steel doors etc but still suffer from significant amounts of damage and repairs. Highest ratio I am aware of is 5:1, as in 5 carers to 1 individual. These properties are suitable for high behavioural issue participants. I understand that the current SDA pricing review is likely to greatly increase the SDA payments for Robust designs as they are just not being built.

 

Hi Cliff

Agree on the quality thing obviously.

I am hoping though that, given the user choice basis for the NDIS, that there will be tenant mobility in the SDA property market. This is unlikely to be the case for cognitively challenged participants but I do hope there is significant enough stock to make it a mainstream property type.

There are large funds here already, it's just that demand is so strong it should take multiple years to catch up the decades of chronic under investment.

 

After meeting with builders and meeting with a few contacts, there is a need for robust properties however there will need to be a substantial SDA increase in payments to make it worthwhile. I don't believe there is any rush to get into SDA, probably better to wait until the SDA review and see how SDA develops in the next year or two. In my view, it is similar to NRAS and its relative complexity and incentives, it is creating sharks that just want to flog stock.

 

Does any organisation build property for a group of people on the Autism spectrum who need peace and quiet and personal space? The "affordable" housing my family uses requires significant "compromise". NRAS units exist in the same complexes so there would be no improvement in quality even if they eventually move into an nras property because nras is meant to be everything that is NOT suitable for anyone who has AS.

 

I'm thinking of developing one of my properties on the Central Coast.
How do I best find out whether there's a demand? Also, I'm a little bit confused by the table that was posted earlier by @RPI, so what would be the best setup in terms of returns? It's an 800sqm block. Does building for disability allow you to increase density, similar to over 55s or low income?
Are the schemes only for developments for carer accommodation? Ideally, I would have liked 2 bed 1 (or 2) bath units, that way I could still rent them out to older people if this scheme changed/stopped.

 

You need to find an SDA provider that will then guide you through demand and suitable designs first. We are only in Northern NSW at this stage.

 

The target market seems a bit small at this stage: Sarah Brady spent two years in aged care. From day one, her family fought to get her out

"The figures show as of the end of last year, less than 1 per cent of young people in nursing homes who were also part of the NDIS, had Specialist Disability Accommodation (SDA) in their plans.

That's 32 people."​

 

That's because the don't have SDA in their plans as yet. 50 young people admitted to aged care a week.

As at March 30 QLD had gotten to a whole 82 new builds and 1182 people with SDA in their plans. There were 12,356 nationwide. It's a lag catching up. Only became possible in QLD to have SDA in plan on 1 July 2018 and at that stage you needed the address of an enrolled and completed dwelling to apply.

We are heading for over 1200 properties being developed for us in QLD, NSW, VIC and NT and it's not making much of a dent. One of our care providers built a house in Ipswich and had so many serious applicants from outside their organisation they rented ordinary houses to accommodate 29 people while they wait for us to build them houses.

PS yes I have an interest in these, do the figures yourself.

Am on a mission to get as many people out of inappropriate homes as possible. This turned from development to an all consuming mission to get as many people out as possible. The number one way young people currently get out of aged care is die. And they are just the aged care ones. 12 months wait to get out of PA spinal at moment.

 

https://www.ndis.gov.au/about-us/publications/quarterly-reports

Quarterly report data above

Some interpretation below
Blog - NDISP

 

D - do you think this is something we should be looking at if there is so much demand?

We are already an accredited affordable housing provider, and an NDIS provider, but not in this category.

 

The compliance is crazy. We charge of 2% of income for compliance because we are looking at north of 1200 properties. Most NFP's are at 7% internally.

It's definitely inline with what you do from my understanding of your org anyway. Happy to chat. initial thoughts are you'd need 75 plus properties to go provider vs using us as a financial break even. I'm on a mission to get people out of crap places so happy to help and see if want to dip toe in with us and then go out under your scope when vol gets high enough etc. Or help setup from get go.

 

OK. Is that 75 dwellings/keys vs houses? We have a couple of land banks and some dev sites under consideration.