A better way to Investing in NDIS: A Focus on People, Not Just Properties

As we navigate the landscape of investment opportunities, it's crucial to dissect the enticing promises surrounding big group homes associated with the NDIS program. You will see companies advertise potential 24 percent returns, a closer examination reveals a reality far removed from the rosy picture painted by some.

The key to our perspective lies in an unconventional approach, we didn't start with the houses; we started with the people. This fundamental shift in focus sets our investment strategy apart and resonates with care organisations for a simple reason—our understanding that the heart of the NDIS program is about choice. Creating attractive housing for participants ensures that our homes are not just structures but desirable living spaces that individuals actively choose to live in.

Contrastingly, many investors, in their pursuit of theoretical returns, have neglected the human aspect of the NDIS program. Their approach, solely centred around high yields and government documentation, overlooks a critical element—the participants who ultimately decide where they want to live. This oversight leads to five significant problems for investors.

Firstly, the sheer size and features of these houses inflate their cost, often exceeding $900,000 to over $1 mil. Consequently, valuations fall short, making borrowing challenging and necessitating significant cash injections, typically around $300,000.

Secondly, the inflated cost creates a mismatch with the surrounding neighbourhoods, causing valuations to dip further. This overcapitalization poses a significant hurdle for investors and reduces the overall appeal of these properties.

The third and most critical problem is the reluctance of individuals to embrace the group housing model. Survey after survey of NDIS participants echoes the sentiment—people do not want to live in large group homes. Unlike traditional housing concerns, affordability is not an issue here, as the government covers rent. Consequently, care organisations are hesitant to place tenants in such settings, given the inherent challenges and lack of sustainability in fostering independence and choice.

The fourth problem emerges from the undesirable nature of these group homes. Care organisations, tasked with promoting independence and choice, are naturally disinclined to manage four-person homes fraught with internal politics and challenges.

Finally, the fifth problem revolves around the future resale of these properties. The stark resemblance to nursing homes makes them unappealing to potential buyers, leading to discounted sales prices and, consequently, an unexciting prospect for initial investors.

In essence, the theoretically high yields promised by these group homes are fundamentally flawed. The oversight of the real human element—the participants with choices—renders these investments less attractive. Even the NDIS documentation forewarns of higher vacancy rates in such group homes, a red flag for those intimately familiar with the system.

Investors should tread cautiously, understanding that success in NDIS investments lies not just in bricks and mortar but in creating homes that resonate with the very people the program seeks to empower. It's time to shift the focus from theoretical returns to investments that prioritise the genuine needs and choices of the individuals at the core of the NDIS program.