Why does the level of the fit-out impact the security of your NDIS investment?

It can be confusing to break down the different types of properties under the NDIS, particularly from an investment point of view. At Mountain Assets, our developer partners focus solely on high physical support apartments that feature a carer’s quarters, which is an important distinction for us.

First, a definition. A high physical support apartment is an apartment built to the highest level of specification under the NDIS act and usually, these are for NDIS participants who have severe mobility issues and are purpose-built to provide them with a higher quality of life. Why this matters in terms of an investment is that because these are more expensive to build, they attract a higher level of funding under the NDIS act and you can see from the NDIS funding documents that a one-bedroom high physical support apartment with an overnight carer’s quarters attracts 114,000 dollars from the federal government per year. This is locked in the act and is a fixed rate so anyone managing a business will know that a fixed-rate income is something that can be depended on.

Secondly, there is a chronic shortage of high physical support apartments in the market. There are many lower end NDIS properties available for investment but due to the more difficult nature of building a high physical support apartment, there are fewer of these available in the market.

Thirdly, due to the specialist nature of these apartments, they attract a different kind of lease. Some NDIS properties attract a standard one-year residential lease and are subject to the weakness of having a vacancy. However, a high physical support apartment attracts a different type of lease, typically a 10-year buy with a 5-year option lease over an entire apartment block, not just individual apartments. This means that with a chronic shortage of these properties, long lease times and healthy levels of funding from the federal government, it’s an attractive opportunity for investors as they move forward and the opportunity exists for investors to assist NDIS participants to improve the quality of their lives through purpose built accommodation.

If you want more information on NDIS investments, contact us here.

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