NDIS housing opportunity flagged for investors

According to managing director of Horizon Property Alliance Michael Knights, the housing program established by the federal government through the National Disability Insurance Scheme (NDIS) could present Australian property investors with untapped opportunities.

Mr Knights said that the program, which covers the cost of accommodation and ongoing care for participants to enter specialised housing, would provide mum and dad property investors and astute business owners with an opportunity to help facilitate the process by aligning themselves with an accredited care provider who helps them establish specialist housing for those with severe disabilities that need 24-hour care.

“We are aware of a variety of models available to investors who want to be part of the scheme, but all revolve around establishing a bespoke home for three to five participants,” the MD said

“The investor owner then grants the care provider permission to operate in the home for a predetermined rental amount and, in many cases, a share of the care business’ profits.”

Mr Knights added that as well as supporting those with severe disabilities, there may also be potential for investors to generate “solid returns”.

“It’s an incredible, government-funded initiative to both help those with disabilities and incentivise private investors through excellent returns,” Mr Knights said. “Frankly, I’ve never seen anything like it in all my years in the industry.”

Mr Knights cited a 2017 Productivity Commission report which showed the NDIS would support around 475,000 people at a cost of $22 billion in its first year.

“It has the potential to create hundreds of thousands of jobs nationally,” the MD continued.

Further, Mr Knights said that the government-funded payments would give investors security of income.

“That said, there are always risks when investing. In this instance, you need to ensure you’re aligned with a high-quality care provider,” Mr Knights said.

“Also, while vacancies are a normal risk for property investors, the government will provide a three-month rental guarantee when rooms become vacant. Given the waiting list that currently exists, however, we don’t envisage vacancies being a major downside.

“The only other risk seems to be future changes in government policy, but we believe the program’s success will become apparent in the short term.”

[Related: 13% of investors will ‘struggle’ to repay P&I]