What is the next investment vehicle that will supersede SDA property?
At properT network, we have identified an emerging massive market and thus we continue down the trend of NDIS. In short, there are hundreds of thousands of NDIS participants who do not qualify for SDA funding but still want to live independently as they do receive some financial assistance from the NDIS (nothing to do with SDA funding). These participants are referred to as SIL’s (Supported Independent Living participants). As mentioned, these participants do get some funding for living out of home and have funding for care too.
Current situation :
- Massive (and sadly a growing) demand for SIL accommodation.
- Complete undersupply of SIL accommodations with no sign of it improving, and every sign getting worse.
- Care Providers daily ongoing battle is to source accommodation for their participants under their care. An almost impossible task.
- Industry competition is coming from Renters, who due to historical low vacancy rates, these renters fight hard for their own rental accommodation and are willing to pay more. The result is a SIL cannot find suited accommodations.
- This further exacerbates the demand versus supply, raising the current problem and with little to no solutions at hand.
Our solution to a growing problem :
- Build a SIL home, with only slight modifications, otherwise they are just like the new build next door.
- This provides much needed and highly sought-after accommodation for participants.
- This also allows an SDA Provider to be your tenant and sign your lease.
- We recommend 3 year minimum or 5 year preferred Head Lease Agreements, with rental increases and renewal clauses.
The benefits and your investment opportunity :
- Participants are found accommodation and can live independently, thanks to you putting your hand up to build a SIL home.
- SIL Providers have a location (your home) which they lease and manage their participants under one roof. Saving them running around and giving them massive comfort knowing they have “their own premises” in which to run their business from.
- How you benefit :
- Long term head lease gives you peace of mind and a strong element of certainty.
- Rent is collected from one source, being the SDA provider, who is your tenant.
- It looks and feels like the new build next door and can easily be sold to an owner or an investor the day you want to exit the investment.
- Build price way lower than SDA property build price and no need for a compliance certificate either.
- Banks will lend if your balance sheet is in order as these are deemed residential properties.
- Attractive stronger yields than the home next door, is powerful benefit to your overall investment strategy.
- Demand is almost insatiable and supply almost zero mitigating your risk,
- NDIS is a massive growth sector and sadly so, will continue to be. Further mitigating your risk.
SIL Homes
If SDA property is unsuited to you, and you are still after high yielding investment property, then a SIL Home could tick your investment boxes adequately for you.
We are aiming to achieve Net Yields of 6% to 7% for you the investor. Remember, the house next door is only getting 3% to around 4% yields and both homes will attract same/similar capital growth.
Just yesterday, one of the property management teams updated us saying they have an agreement from a SIL Provider for 19 new SIL Homes!! Can you, like us, now also identify just how large the opportunity is.
SIL Home or Dual Key ? … is there even a question!
SIL property management
The team behind the investment opportunity are building a data base of SDA Providers who are desperate for accommodation for their participants and are reaching out to team asking for SIL homes. The team will negotiate and arrange the Head Lease on the SIL Home, and then manage the property on your behalf. Property management fees are in line with other resi property management fees.
FYI, it is up to the SIL Provider to access the participants ‘living out of home rental assistance package’ plus other income from services provided, to be able to meet the Head Lease rental agreement negotiated with them. Hence our calculations at around that 6% to 7% yield mark, net of fees, to you.
The demand is twofold, first from Participants desperately in need of accommodations and secondly from SIL Providers crying out for accommodations for their participants and a home from which they can securely run their own businesses out of.
