Specialist disability accommodation is, by definition, highly specialised. To ensure your SDA investment meets the minimum standards set by the NDIA for this form of accommodation, they provide the industry with the SDA building design guide.
Many of the SDA investors I have consulted with over the years didn't understand from the outset that these standards are the minimum set by the NDIA. Just to be compliant with these standards does not guarantee zero vacancy.
On the contrary...
In this article we discuss the importance of going beyond the minimum design standards when designing and building suitable specialist disability accommodation for persons with disability.
The Number One Fear: Vacancy
SDA property investors will say their number one fear is a vacant or partially vacant property. You see, the reality is NDIS participants are the same as you and I: they want the best possible home to live in that really meets their needs beyond what the able body architect thinks they need.
As an investor, you would be wise to go beyond the minimum standards of design.
Why?
When the market for SDA reaches saturation and your tenant is faced with a whole bunch of competing alternatives to your property, they might move.
Meeting the minimum design standards does not mean they will love where they live. When prospective investors come to us for help with everything 'SDA', apart from making sure you choose a location where demand exceeds supply, we also help your ensure that long term your property is the most desirable amongst any new entrants to the market.
The SDA design standards for building SDA housing sets out the minimum
requirements in design to obtain certification within the relevant SDA category.
They are intended to ensure that the building is fit for purpose – that is all.
Nowhere within the guidelines does it talk about Participant preferences in location, design, inclusions etc. There is often a big gap between what is compliant and what Participants would choose to live in.
It is important to recognise that a part of the SDA income comes from what is called the “Reasonable Rent Contribution”. Without going too deep into it, it is the maximum amount of rent that the owner of the property can charge a Participant as their contribution towards the total rent. This amount is the equivalent of 25% of the Commonwealth Support Pension, or a bit over $230/week.
This is important to understand: whether you build a dwelling that is minimum standard, or you build a magnificent dwelling with all of the bells and whistles, the rent is capped. So, if everything else is equal, which SDA home would you choose for yourself or your family, should such circumstances arise?
SDA Design is Evolving
A few years ago, when SDA was finding its feet a three to four Participant house with one living and dining room was the norm.
Investors soon discovered that expecting three to four Participants to happily live together with only one common area was not realistic. New homes came onto the market offering fewer bedrooms and two common areas: a lounge/dining room and a separate TV room and this is where most designs are at present.
However, do not think that this is the end of the evolution of design. Dwellings in year 7 and 14 will no doubt look quite different than they do today, and new ideas and design concepts are already starting to find their way into the market.
The Driving Force Behind SDA Design
The driving force will always be supply and demand, that is the way the system was set up by the NDIA in the first place: to let the market decide.
The key to successful design is to look at your dwelling from the perspective of the Participant. Unfortunately, too many investors are led by marketers to believe that “you build it, and they will come”. This may be true, if there is a significant gap between supply and demand in the area you are investing in (a whole different topic), but what about year 7 and year 14 when this gap has been plugged?
Where will that leave you as the investor?
Consider, what the investor of tomorrow will be doing to attract Participants to their home and potentially away from yours?
Will you have wished that you sacrificed 2% of your annual return and built a home that the Participant would never want to leave, and future Participants would snap up if a room became available?
3 Tips for Future Proofing Your SDA Design
You can’t predict the future, but to a degree you don’t have to if you put the needs of the Participant first and foremost today:-
- Choose the right area to begin with, one where there is considerable unmet demand.
- Choose the right location within the right area, one that makes life as enjoyable as possible.
- Make sure that building design exceeds the needs of the Participant, not the minimum NDIS standard.
The minimum standard may be enough today, but will it be enough in the future? What are your suggestions for future-proofing your SDA home? Let me know in the comments below.
By the way, I personally use a floor plan that has been vetted and loved by Participants. I'll share it with you when we embark on a SDA home project together.
