We all know location is important, right? It's not the only important factor to consider when investing in SDA housing, however, it's certainly up there in the "make or break my investment" rating.
What can you do to minimise the risks and acquire a specialised disability accommodation (SDA) that your tenants will love and your hip pocket will love even more.
There are basically three steps in determining the most suitable location for an SDA investment, and unfortunately, many investors get it wrong.
- Research – your location must be supported by the data
- Land & Building availability – trickier than you think
- SDA Provider – you need an SDA Provider you can trust
Research
Every part of Australia is broken down into what are called SA4 and SA3 statistical areas by the Australian Bureau of Statistics (ABS), and the NDIA uses these areas for their purposes.
An example of this is as follows:-
This SA4 region is called Sydney – Blacktown, which is broken down to (in this case) 3 smaller SA3 regions called Blacktown, Blacktown North and Mount Druitt.
SA4 regions will generally have a population of around 100,000 to 300,000 in country areas and between 300,000 and 500,000 in cities.
SA3 areas will have populations of between 30,000 and 130,000, although this can vary quite a bit).
This link will help you identify the various regions.
There are various unbiased sources of information available to you to help you identify a suitable location, including the quarterly data provided to the NDIS Minister, ABS statistical data, listings of available properties posted by the NDIA as well as private web sites such as Housing Hub.
At an absolute minimum, you need to know:-
- The current level of supply and demand and what is currently under construction
- What the supply is comprised of:-
- Existing & legacy stock or new builds?
- What disability category?
- What type of buildings are being built (apartments, villas, houses)?
- How many Participants per dwelling (density?)
- The number of SDA Participants both now and projected:-
- How many Participants are using their funding?
- How many Participants have funding and are not yet using it?
- How many Participants are in the process of getting funding?
It seems like a lot, but not finding out could lead to grave disappointment.
For example, here are the numbers as of June 2024 for Melton/Bachus Marsh (extract from SDA Data Report – Melbourne West):-
(Note: the following is an example where Investors may not have undertaken their research)
In top of this, there are a further 1,369 rooms currently under construction in Melbourne West, yet meanwhile, there are areas where there is a significant undersupply of SDA dwellings.
Undertaking independent and verifiable research is so important, so feel free to reach out to us so we can show you where to find the information that you require, or we can put it together for you.
Land & Building Availability
Once you have identified the areas that look promising, you will need to secure an appropriate block of land and source a reputable builder.
Land availability is a double-edged sword; too much land and you may end up with a Melton/Bacchus Marsh situation. Too little land and you won’t get off the ground.
Beyond that, there are a number of criteria, both prescribed by the NDIA (SDA Design Standards) as well as those that make your property attractive to potential tenants (Participants) and their Care Providers (SIL’s).
A lot of builders will not build SDA dwellings as the requirements are far more prescribed, and this can be quite problematic particularly in regional areas, so make sure that you can access a builder that has both the capability as well as the desire to undertake an SDA build.
“In the time that it takes us to build an SDA building, we could have built two of our other buildings” Comment by a prominent WA builder
SDA Provider
A good SDA Provider is well connected to the disability community and will give you honest advise as to the potential of your property, not just repeat what you want to hear.
Be prepared with a list of questions for your conversations with the Provider as you will be “tied to the hip” for many years to come.
Conclusion
Do your homework!
Finding suitable Participants is complicated and time consuming, so spending time choosing the right SA3 location, the right block of land, the right builder and a well-connected SDA Provider will no doubt serve you well.
