Video summary

Webinar - SDA Tenancy Mixes

Main summary

Key takeaways

Finance

Presenters / Sources

  • Debbie — NDIS Property Australia
  • Min — co-presenter
  • Denise — in the background answering questions

Data snapshot source mentioned:

  • Bwin Investments

Other referenced sources/tools:

  • NDIS SDA Price Calculator
  • Australian Bureau of Statistics (ABS) (for SA4 lookup)

Disclaimers

“Not financial advice.”

  • Viewers are advised to seek independent advice before proceeding with any NDIS property development or investment.

(Operational note mentioned: recording/Q&A logistics are handled separately from financial disclosure.)

What the Webinar Is About (Core Investment Concept)

  • The SDA tenancy mix—specifically how many residents share the dwelling and their approved SDA design category funding—largely determines SDA income and therefore return on investment.
  • Tenancy outcomes are described as complex and varied, driven by:
    • Participant funding types
    • Dwelling type
    • Design category
    • Location factor
    • Rules such as the “lesser of rule.”

Market / Supply–Demand Context (Numbers Cited)

SDA pipeline snapshot (Bwin Investments)

  • Approved participants: 24,761
    • Reported as fairly consistent over ~3 years (small growth)
  • Supply / pipeline:
    • ~13,000 enrolled places/bedrooms (approx. 13,000 enrolled)
    • ~15,500 in the pipeline
  • Interpretation provided:
    • Pipeline + existing stock may create oversupply risk
    • Therefore tenancy mix feasibility (and demand) matters.

NDIS system scale (later Q&A / discussion)

  • NDIS participants: about ~720,000 (rounded)
  • Registered providers: about ~20,000
  • Unregistered providers: about ~300,000
  • Note: about ~50% are children, which reduces the effective adult participant/provider ratio when excluded.

SDA Product / Eligibility Framing (Instruments, Assets, Sectors)

SDA dwelling types mentioned

  • Group homes (explicit caution): described as “phased out”; not recommended
  • Focused dwelling types:
    • Houses
    • Apartments
    • Villas
    • Plus configurations treated as dwelling types under rules (e.g., duplex/townhouse bundled)

Resident sharing formats (tenancy mix examples)

Examples referenced include:

  • 1 resident
  • 1–2 residents
  • 1–3 residents (frequently referenced as common)
  • 2–3 residents in some contexts (e.g., house/villa)

SDA design categories (funding types) mentioned

  • High Physical Support (HPS)
    • Described as highest funding category (wheelchair/automation/hoists/battery backup, etc.)
  • Fully Accessible (FA)
  • Improved Livability (IL)
  • Robust
    • Includes safeguards like soundproofing (and complex behaviour-related scenarios)

Practical Methodology / Framework Shared: “DDD”

A simplified feasibility framework was shared:

D = Data

  • Demand
  • Expected investment returns
  • Local oversupply risk
  • Demand for specific participant cohorts and housing types

D = Design

  • Must meet NDIS standards (baseline compliance)
  • “Good design” beyond standards:
    • Accessibility
    • Future-proofing
    • Quality of life
    • Sustainability
  • Claimed impact:
    • Can support higher tenant satisfaction
    • Potentially longer tenancies

D = Desirability

  • Location
  • Amenities
  • Tenant/provider “workability”
  • Includes care team access/travel practicality
  • Emphasizes the home as both:
    • Living space
    • Care workplace

SDA Pricing / Income Calculation Tool (Step-by-Step Inputs)

Tool referenced

  • NDIS SDA Price Calculator
    • Downloadable Excel tool (not Google Sheets)
    • Updated twice per year when MRC is updated
    • SDA prices updated 1 July by CPI

Inputs highlighted

  • Enrolment year (example used: post-2023 new build)
  • Dwelling type (house/apartment/villa/duplex-townhouse etc.)
  • Design category (IL / FA / HPS / Robust)
    • including sub-options (e.g., robust breakout rooms)
  • OA = On-site overnight assistance (carers)
  • Fire sprinklers (optional input)
  • GST / income tax credit claimed?
    • If an investor can claim GST back (company/trust structure), outcomes can differ
    • If a vendor/developer claimed GST, the investor may not
  • Location factor via SA4
    • Viewers instructed to look up SA4 by address

Outputs described

  • SDA tenant funding amount
  • Plus MRRC (Maximum Reasonable Rent Contribution)
  • Together = expected total income potential for the scenario

MRRC Definition and Role

  • MRRC = 25% of the Disability Support Pension + Commonwealth Rent Assistance
  • Described as fixed across Australia
  • Used in combination with SDA funding to estimate total income potential

Location Factor Example Numbers

  • Median “Capital City” location factor = 1.0
  • Sydney Eastern Suburbs ≈ 1.9
    • described as nearly doubling SDA income vs 1.0
  • Queensland example “IPS” ≈ 0.84
    • reduces below median

Explicit Numeric Example (Calculator)

  • Example figure mentioned: $94,818 for one tenant in a two-resident house
  • Then SDA tenant funding + MRRC = total income expectation for that scenario.

Tenancy Mix Implications: Forecasting Returns and Key Rules

1) Income “maximums” can be misleading

  • Warning:
    • Don’t assume your tenancy mix scenario equals the highest possible income
  • Reason:
    • Real-world probability that tenants match the required combinations (e.g., HPS/FA/IL and sharing categories)
  • Rule-of-thumb:
    • Use (maximum scenario / 2) as a more conservative gross-income estimate (i.e., “divide by half”)

2) Participant funding frequency (probability driver)

  • HPS: only about 20–25% of participants
  • FA/IL: collectively about ~50% across those categories (approx. stated)
  • Therefore, expecting all tenants to be HPS is unlikely.

3) “Lesser of rule” (major constraint)

  • Even if the sum of individual tenant SDA funding looks higher, the payout is capped by the enrolled dwelling maximum.

Example (4-bed house):

  • Max allowed for enrolled setup: about $180,000 total ($60,000 per room)
  • If tenant funding mix is higher (example cited):
    • FA tenant could be $80k (1–2 funding) (described as rare)
  • Lesser of rule outcome:
    • Payout capped at $60k vs $80k → $60k is paid

More examples:

  • Apartment upgrade vs house cap:
    • Apartment has $100k (1:1), but enrolled house cap = $60k
    • Outcome: $60k (lesser of)
  • Villa vs house:
    • Villa participant: $40k (IIL 1–2)
    • House cap: $60k
    • Outcome: $40k is paid (because villa funding is less)

Enrolment category mismatch caution

  • A dwelling listed on the market may be enrolled as 2-tenant, which changes income versus a 1-tenant scenario.
  • A participant might “appear eligible” for higher funding, but actual income may be drastically lower due to enrolment resident arrangement rules.

4) Tenant procurement/matching affects realized income

Best returns depend on finding participants whose:

  • SDA funding aligns with the enrolled dwelling setup
  • care needs are compatible for shared housing

Operational notes emphasized:

  • Staffing/care compatibility is essential
  • Shared housing may require training and operational safeguards
  • Robust participants may generally need careful matching and were described as “generally wouldn’t” share, per discussion.

Appendix H (Step-Up Mechanism Using Non-SDA Tenants)

What Appendix H is (as described)

  • Allows an SDA-funded participant to share with non-SDA-funded tenants
  • It may include broader non-SDA persons when appropriate
  • Described as:
    • Not necessarily applied separately
    • Included automatically in the plan if appropriate and approved by relevant parties

Claimed income impact

  • Presenters stated it can significantly increase income
  • Rationale: it compensates for “missing” SDA tenants.

Numeric example (as narrated)

  • Scenario: House-funded house, 3-resident, 1–3
  • Baseline:
    • One SDA tenant in one room: ~$78,868
    • Other rooms empty
  • Appendix H tenant:
    • Non-SDA “friend” contributes (described using pension-based approximations, including values around ~30% of DSP ≈ 13k then ~25% ≈ 10–11k)
  • Combined result:
    • Additional income from Appendix H: ~$44,000
    • Total income cited: ~$122,000
    • Another phrasing referenced: total “133 grand income” depending on interpretation

Yield / Return Benchmarks and Feasibility Outcomes

Gross vs net yields

  • Ranges stated:
    • Gross yield: ~10–15%
    • Net yield: ~8–11%
  • Message:
    • Net yield is the “true important number.”

Feasibility report options mentioned (conceptually)

  • 2-resident house
  • 3-resident house
  • 4-resident duplex
  • 3 villas
  • mana home
  • NA2 XL (double story unit concept with lift; SDA enrolled as apartments)

General ranking stated: apartments higher / housing lower

  • Income ranking described:
    • Highest for apartments
    • Lower for housing
    • Lower again for villa/duplex/townhouse
  • Implication:
    • You might fit more tenants on a site with villas/duplex
    • But income can be penalized because SDA funding differs by dwelling type and enrolment rules.

Development Design Guidance (Finance-Relevant Because It Affects Tenantability)

Floorplan caution: “poor design” reduces realistic occupancy

Example criticism (4-bedroom house):

  • 3 participant bedrooms with ensuite
  • But only one kitchen/living space
  • No second living/multi-purpose room
  • Limited storage for equipment
  • HPS may require space/charging for mobility devices

Implied recommendation:

  • Modify layout to create second living/multi-purpose room and/or better storage
  • Otherwise, returns may rely on only 1–2 tenants rather than 3.

Dual key / dual occupancy design trade-off (income vs cost)

  • Dual-key design described as housing up to 3 tenants more successfully due to separation
  • Negatives:
    • Higher build area and cost
      • Typical 4-bed maybe ~210–220 m²
      • Dual-key example ~280–300 m²
  • Presenter stated income is lower overall for this type, tied back to tenency mix and dwelling-type funding ranking.

Granny flat strategy mentioned as popular

  • Adding a granny flat can be:
    • Cost-effective
    • Increase flexibility of tenant mix
  • Example best case described:
    • 3 participants in the house + carer, or other high-demand outcomes.

Timelines for Analysis / Due Diligence

  • Quick “tenancy mix report” for already enrolled SDA type: ~1 week
  • Full feasibility with multiple build options (e.g., “6 to 10 options”): ~3 to 5 weeks

Key risk/caution:

  • Don’t rely on claims like “people lining up waiting”
  • During development (about ~1 to 1.5 years), conditions can change
  • Pipeline can contribute to oversupply risk.

Tenant Procurement Notes (How Investors Find Participants)

  • Only an SDA provider can:
    • Enroll property with NDIS
    • Claim SDA funding
  • Traditionally, SDA providers source tenants via:
    • SIL networks
    • support coordinators
  • Other procurement options may exist; investors can also directly engage NDIS providers.
  • Service mentioned:
    • SDA Housing Assist (tenency procurement backup)

SIL Provider Viability Context (Risk to Realizing Income)

  • SIL providers can struggle financially due to:
    • Difficulty finding compatible clients
    • Economics of running care when homes are not filled
  • If only one participant is present:
    • SIL funding/hours and hourly rates make sustainability harder
  • Participants are often funded for shared support at 1-to-3
    • Low occupancy can therefore threaten operational stability, indirectly threatening income realization.

Final Takeaways / Key Cautions

  • SDA income depends on:
    • Tenancy mix
    • enrolled dwelling parameters
    • participant funding
  • The “lesser of rule” can materially reduce returns.
  • Don’t assume maximum theoretical income—use conservative expectations (example: max/2).
  • Validate supply pipeline and the SA4 location factor.
  • Verify designs can realistically support the targeted resident count (e.g., second living space, privacy, storage, equipment charging).
  • Appendix H can increase income, but only when sharing with non-SDA tenants is in the SDA participant’s best interests.

Disclosures / Disclosures Repeated

  • “Not financial advice” and seek independent advice (stated at the start)
  • Additional operational note: recording and Q&A logistics are not treated as financial disclosure

Mentioned Entities / Sources (Non-exhaustive)

  • NDIS Property Australia
  • Bwin Investments (data snapshot)
  • ABS (SA4 lookup)
  • National SDA / SIL Summit (Gold Coast, end of September) (event promo)
  • Spotify (podcast hosting; referenced via QR code)

Original video