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The benefits of investing in an NDIS property
Meeting the increasing demand for housing is a necessary challenge for governments and builders in accommodating the 3.96 million Australians and 1.1 million New Zealanders living with a disability. The Australian Government is closing the gap when it comes to the supply of specialist disability accommodation (SDA) and, through the National Disability Insurance Scheme (NDIS), they are offering investors generous incentives to build houses that disabled people desperately need. These incentives mean that investors receive an above-market rental income — achieving yields of up to 16 per cent. Funding the cost of specialist disability accommodation is a key area supported by the NDIS. Similarly, the New Zealand Disability Strategy was created to guide the work of government agencies on broad-reaching disability issues — from 2016 to 2026. Both organisations serve to influence decision making on the health and wellbeing, education and economic choices that improve the lives of millions of people in Australia and New Zealand living with a disability. Specialist disability accommodation (SDA) is an important component in fulfilling these essential needs. This sector is also proving to be a potential boon for investors. The investment gains of an SDA The government-backed security of an SDA means there is almost no risk with this investment — and unlimited returns. Another major benefit is that there is no risk of vacancy. With increasing numbers forced to live in nursing homes due to the lack of SDA, your investment property will rarely if ever be left vacant. An SDA also attracts a pegged return on the consumer price index. This has been designed so that your rental return will rise in line with inflation. Government incentives ensure a return on investment that is around 500 per cent higher than traditional rentals. A biophilic quality is also gained by making an ethical investment in the wellbeing and lifestyle improvement of renters living with a disability. How to purchase an SDA property Founder and managing director of NDIS Loan Experts and SMSF Loan Experts Yannick Ieko recommend several ways for you to purchase an SDA property. “Firstly, you can purchase a property and adapt it based on SDA housing requirements. However, this tends to require substantial and complex work and the scheme sets a minimum spend the investor must be able to demonstrate to qualify as a new build in the scheme,” Mr Ieko says. Alternatively, Mr Ieko adds that you can purchase an SDA property that is already approved and equipped to house NDIS participants. These can be sourced through real estate agents and specialist agents — but they are in short supply. Family Offices, investment groups and other institutional investors actively seek out these properties for their investment portfolios. “The scenario we see the most for retail investors is for the house and land package. This involves the purchase of a block of land in an SDA-friendly location and then the construction of an SDA-approved house on that parcel,” Mr Ieko says. How to find an NDIS tenant This necessitates the connection of NDIS participants and SDA dwelling owners. But help is close at hand. The NDIS operates under a broad market approach. On this basis, participants are expected to find and apply for advertised vacancies themselves. This is done in two ways. Either a participant finds their own property through real estate sites or via NDIS service providers that lease entire properties and rent out rooms to participants....
How to combat the shortage of tradespeople
The Housing Industry Association (HIA) says the shortage of skilled tradespeople is “the most significant shortage on record”. “All trades recorded a deterioration in availability during the December 2021 quarter. Bricklaying, carpentry, joinery, roofing, general building and other trades have reported the most severe shortages on record,” HIA Economist Angela Lillicrap says. She explains the shortage is due to a boom in detached house construction and renovations, which has “seen demand for land, labour and materials skyrocket”. The result, according to the HIA, is that construction timeframes are being pushed out. And there may be no immediate relief in sight. Skilled trades are expected to be in high demand throughout 2022 and into 2023. Construction costs rise 7.3 per cent The challenge facing home builders and anyone planning even a minor home improvement goes beyond a tight supply of tradespeople from all areas of construction. The latest Cordell Construction Cost Index shows construction costs nationally increased 7.3 per cent last year, the highest annual hike since March 2005. The cost spike is being driven by increased demand plus pandemic-related supply chain disruptions leading to a severe shortage of materials. Be prepared Rising building costs coupled with a shortage of tradies could affect your building project. That doesn’t mean you should scrap plans, but it does pay to be prepared: Before signing a building contract, check how the builder can pass on any cost blow-outs. Speak to your builder about realistic construction timeframes. For DIY projects, allow room in your budget for unexpected cost increases. Importantly, talk to your mortgage broker about finance options to pay for a new build or renovations. If you’re planning a new home, a construction loan can be a suitable form of funding. What are construction loans? Construction loans, also known as owner-builder loans, are different from regular home loans, due to building works requiring ongoing payments as the construction progresses, according to Mortgage Choice. In the case of a traditional home loan, the totality of funds will be made available in a single lump sum, while a construction loan lets borrowers draw on the loan balance when payments need to be made to the builder. These payments are made at key stages of the building process and are known as progress payments. If you’re giving your place a makeover, it may be possible to draw on the home equity you’ve built up through a loan top-up or refinancing – it can be a way of preserving personal savings. The main point is to head into any sort of building project with your eyes wide open. Speak to your mortgage broker to know the finance options available to help you get started on your project....
Office occupancy rates bounce back post-Omicron and holidays
The latest Office Occupancy survey by the Property Council of Australia shows that following record-low occupancy in January, caused by a combination of Omicron and the holiday period, there was a consistent lift in office workers returning to CBDs across Australia. The February survey of office owners revealed Melbourne’s CBD reached 15 per cent occupancy, while Canberra achieved 21 per cent, levels not seen in those capitals since June 2021 (when occupancy was at 26 per cent and 72 per cent respectively). Sydney recorded 18 per cent occupancy, which was just shy of its November figure (23 per cent). Property Council Chief Executive Ken Morrison says that while the results were encouraging, more work needs to be done. “There is still a long way to go and there are local factors affecting each city, but these figures are a strong start which we expect to accelerate in March, as more businesses reopen their offices. “It’s important that governments, councils and businesses have a big focus on bringing our CBDs back to life,” he says. The strongest rebounds were recorded in Brisbane, where occupancy jumped from a record low of 13 per cent to a record high of 41 per cent. Adelaide also came off a low of 11 per cent in January to achieve 47 per cent occupancy in February. The only CBD that didn’t record a positive boost was Perth, which recorded its lowest office occupancy rate (55 per cent) since the survey commenced in July 2020. What this means for regions Experts note that if we do see the return to the office increasing or remaining consistent, a large number of regions could see a fall in house prices at a faster rate. The regions are more volatile than the capital cities, simply because they are smaller markets with lower liquidity. So, it doesn’t take much of a change in demand for there to be a significant change in the market on the ground. Improving workplace wellbeing and productivity In the interests of maintaining solid growth from a commercial and employment perspective, the most successful companies are well aware that staff are a major asset. Creating a healthy work environment gives you and your employee’s opportunities to share ideas for your company that can encourage growth. A healthy office environment can also boost your employees’ productivity levels and reduce your chances of dealing with frequent absenteeism and, in certain industries, workers’ compensation and medical claims. Company leaders should firstly hire the right staff for the job. Creating a comfortable, light-filled office space and improving communications are simple steps to forging workplace unity and enhancing the bottom line....
What level of home and contents insurance should you invest in?
If natural disasters foretell one aspect about home and contents insurance, it’s that more is more when it comes to the policy holder’s peace of mind and financial recompense. Home and contents insurance is only as effective as the features offered by the insurer and your level of coverage. But in the event of natural disasters, including flooding and bushfires, is there a general guideline as to just what your home is insured for? The trauma associated with damage or theft to your property is allayed by the fact that your home and contents insurance should cover most, all or a portion of the repair or replacement bill. But many homeowners are underinsured and thereby face the risk of having to replace or rebuild some or all of the damage or loss at their own expense. In terms of basic or full coverage and the inclusion of optional extras, it’s difficult to quantify for the unknown, but it’s better to be over-insured in the long run. General insurance coverage Most home and contents insurance policies provide coverage for the following events and incidents: Natural disasters and other events such as fire or lightning damage Theft or malicious damage to your contents, including vandalism Damage caused by the sudden bursting of water or liquid The impact from unforeseen hazards, such as a falling tree Damages caused to your contents during transit (up to 20 per cent of the sum insured). What’s the cost? Taking out home and contents insurance is a relative concept. The cost depends on the type and location of the property, age and investment status of the homeowner and level of coverage sought. The cost of standard home and contents insurance for an average Australian and New Zealand residence is between $130 and $150 per month. Extras such as temporary accommodation in the event that you need to vacate the premises for rebuilding or extensive repairs should be considered. The suitability of insurers is another area to assess. For example, the value of your property and contents could exceed the underwriting criteria. As with all investments, it’s always best to shop around. Most insurers provide online home, building and contents calculators so that you can methodically predetermine your initial costs and exactly what will be covered. It all adds up to peace of mind Estimate your property and contents value realistically, but with an emphasis on complete financial protection in the event of full or partial coverage. Retain receipts, wherever possible, as proof of purchase and estimable value. Don’t forget to account for recent acquisitions, home renovations and property valuations to ensure your home and contents insurance aligns with its true worth. This might bump up your premiums slightly, but the peace of mind of being adequately covered is a priceless commodity. Read between the lines As with any real estate contract, it’s essential that the policyholder reads the fine print carefully. What exactly are you covered for and, importantly, when will damage or lost property be replaced or rebuilt? If you are unsure about any contractual legalese, seek qualified advice....
The benefits of investing in an NDIS property
Meeting the increasing demand for housing is a necessary challenge for governments and builders in accommodating the 3.96 million Australians and 1.1 million New Zealanders living with a disability. The Australian Government is closing the gap when it comes to the supply of specialist disability accommodation (SDA) and, through the National Disability Insurance Scheme (NDIS), they are offering investors generous incentives to build houses that disabled people desperately need. These incentives mean that investors receive an above-market rental income — achieving yields of up to 16 per cent. Funding the cost of specialist disability accommodation is a key area supported by the NDIS. Similarly, the New Zealand Disability Strategy was created to guide the work of government agencies on broad-reaching disability issues — from 2016 to 2026. Both organisations serve to influence decision making on the health and wellbeing, education and economic choices that improve the lives of millions of people in Australia and New Zealand living with a disability. Specialist disability accommodation (SDA) is an important component in fulfilling these essential needs. This sector is also proving to be a potential boon for investors. The investment gains of an SDA The government-backed security of an SDA means there is almost no risk with this investment — and unlimited returns. Another major benefit is that there is no risk of vacancy. With increasing numbers forced to live in nursing homes due to the lack of SDA, your investment property will rarely if ever be left vacant. An SDA also attracts a pegged return on the consumer price index. This has been designed so that your rental return will rise in line with inflation. Government incentives ensure a return on investment that is around 500 per cent higher than traditional rentals. A biophilic quality is also gained by making an ethical investment in the wellbeing and lifestyle improvement of renters living with a disability. How to purchase an SDA property Founder and managing director of NDIS Loan Experts and SMSF Loan Experts Yannick Ieko recommend several ways for you to purchase an SDA property. “Firstly, you can purchase a property and adapt it based on SDA housing requirements. However, this tends to require substantial and complex work and the scheme sets a minimum spend the investor must be able to demonstrate to qualify as a new build in the scheme,” Mr Ieko says. Alternatively, Mr Ieko adds that you can purchase an SDA property that is already approved and equipped to house NDIS participants. These can be sourced through real estate agents and specialist agents — but they are in short supply. Family Offices, investment groups and other institutional investors actively seek out these properties for their investment portfolios. “The scenario we see the most for retail investors is for the house and land package. This involves the purchase of a block of land in an SDA-friendly location and then the construction of an SDA-approved house on that parcel,” Mr Ieko says. How to find an NDIS tenant This necessitates the connection of NDIS participants and SDA dwelling owners. But help is close at hand. The NDIS operates under a broad market approach. On this basis, participants are expected to find and apply for advertised vacancies themselves. This is done in two ways. Either a participant finds their own property through real estate sites or via NDIS service providers that lease entire properties and rent out rooms to participants....
How to combat the shortage of tradespeople
The Housing Industry Association (HIA) says the shortage of skilled tradespeople is “the most significant shortage on record”. “All trades recorded a deterioration in availability during the December 2021 quarter. Bricklaying, carpentry, joinery, roofing, general building and other trades have reported the most severe shortages on record,” HIA Economist Angela Lillicrap says. She explains the shortage is due to a boom in detached house construction and renovations, which has “seen demand for land, labour and materials skyrocket”. The result, according to the HIA, is that construction timeframes are being pushed out. And there may be no immediate relief in sight. Skilled trades are expected to be in high demand throughout 2022 and into 2023. Construction costs rise 7.3 per cent The challenge facing home builders and anyone planning even a minor home improvement goes beyond a tight supply of tradespeople from all areas of construction. The latest Cordell Construction Cost Index shows construction costs nationally increased 7.3 per cent last year, the highest annual hike since March 2005. The cost spike is being driven by increased demand plus pandemic-related supply chain disruptions leading to a severe shortage of materials. Be prepared Rising building costs coupled with a shortage of tradies could affect your building project. That doesn’t mean you should scrap plans, but it does pay to be prepared: Before signing a building contract, check how the builder can pass on any cost blow-outs. Speak to your builder about realistic construction timeframes. For DIY projects, allow room in your budget for unexpected cost increases. Importantly, talk to your mortgage broker about finance options to pay for a new build or renovations. If you’re planning a new home, a construction loan can be a suitable form of funding. What are construction loans? Construction loans, also known as owner-builder loans, are different from regular home loans, due to building works requiring ongoing payments as the construction progresses, according to Mortgage Choice. In the case of a traditional home loan, the totality of funds will be made available in a single lump sum, while a construction loan lets borrowers draw on the loan balance when payments need to be made to the builder. These payments are made at key stages of the building process and are known as progress payments. If you’re giving your place a makeover, it may be possible to draw on the home equity you’ve built up through a loan top-up or refinancing – it can be a way of preserving personal savings. The main point is to head into any sort of building project with your eyes wide open. Speak to your mortgage broker to know the finance options available to help you get started on your project....
Office occupancy rates bounce back post-Omicron and holidays
The latest Office Occupancy survey by the Property Council of Australia shows that following record-low occupancy in January, caused by a combination of Omicron and the holiday period, there was a consistent lift in office workers returning to CBDs across Australia. The February survey of office owners revealed Melbourne’s CBD reached 15 per cent occupancy, while Canberra achieved 21 per cent, levels not seen in those capitals since June 2021 (when occupancy was at 26 per cent and 72 per cent respectively). Sydney recorded 18 per cent occupancy, which was just shy of its November figure (23 per cent). Property Council Chief Executive Ken Morrison says that while the results were encouraging, more work needs to be done. “There is still a long way to go and there are local factors affecting each city, but these figures are a strong start which we expect to accelerate in March, as more businesses reopen their offices. “It’s important that governments, councils and businesses have a big focus on bringing our CBDs back to life,” he says. The strongest rebounds were recorded in Brisbane, where occupancy jumped from a record low of 13 per cent to a record high of 41 per cent. Adelaide also came off a low of 11 per cent in January to achieve 47 per cent occupancy in February. The only CBD that didn’t record a positive boost was Perth, which recorded its lowest office occupancy rate (55 per cent) since the survey commenced in July 2020. What this means for regions Experts note that if we do see the return to the office increasing or remaining consistent, a large number of regions could see a fall in house prices at a faster rate. The regions are more volatile than the capital cities, simply because they are smaller markets with lower liquidity. So, it doesn’t take much of a change in demand for there to be a significant change in the market on the ground. Improving workplace wellbeing and productivity In the interests of maintaining solid growth from a commercial and employment perspective, the most successful companies are well aware that staff are a major asset. Creating a healthy work environment gives you and your employee’s opportunities to share ideas for your company that can encourage growth. A healthy office environment can also boost your employees’ productivity levels and reduce your chances of dealing with frequent absenteeism and, in certain industries, workers’ compensation and medical claims. Company leaders should firstly hire the right staff for the job. Creating a comfortable, light-filled office space and improving communications are simple steps to forging workplace unity and enhancing the bottom line....
What level of home and contents insurance should you invest in?
If natural disasters foretell one aspect about home and contents insurance, it’s that more is more when it comes to the policy holder’s peace of mind and financial recompense. Home and contents insurance is only as effective as the features offered by the insurer and your level of coverage. But in the event of natural disasters, including flooding and bushfires, is there a general guideline as to just what your home is insured for? The trauma associated with damage or theft to your property is allayed by the fact that your home and contents insurance should cover most, all or a portion of the repair or replacement bill. But many homeowners are underinsured and thereby face the risk of having to replace or rebuild some or all of the damage or loss at their own expense. In terms of basic or full coverage and the inclusion of optional extras, it’s difficult to quantify for the unknown, but it’s better to be over-insured in the long run. General insurance coverage Most home and contents insurance policies provide coverage for the following events and incidents: Natural disasters and other events such as fire or lightning damage Theft or malicious damage to your contents, including vandalism Damage caused by the sudden bursting of water or liquid The impact from unforeseen hazards, such as a falling tree Damages caused to your contents during transit (up to 20 per cent of the sum insured). What’s the cost? Taking out home and contents insurance is a relative concept. The cost depends on the type and location of the property, age and investment status of the homeowner and level of coverage sought. The cost of standard home and contents insurance for an average Australian and New Zealand residence is between $130 and $150 per month. Extras such as temporary accommodation in the event that you need to vacate the premises for rebuilding or extensive repairs should be considered. The suitability of insurers is another area to assess. For example, the value of your property and contents could exceed the underwriting criteria. As with all investments, it’s always best to shop around. Most insurers provide online home, building and contents calculators so that you can methodically predetermine your initial costs and exactly what will be covered. It all adds up to peace of mind Estimate your property and contents value realistically, but with an emphasis on complete financial protection in the event of full or partial coverage. Retain receipts, wherever possible, as proof of purchase and estimable value. Don’t forget to account for recent acquisitions, home renovations and property valuations to ensure your home and contents insurance aligns with its true worth. This might bump up your premiums slightly, but the peace of mind of being adequately covered is a priceless commodity. Read between the lines As with any real estate contract, it’s essential that the policyholder reads the fine print carefully. What exactly are you covered for and, importantly, when will damage or lost property be replaced or rebuilt? If you are unsure about any contractual legalese, seek qualified advice....