5 Questions to Ask an SDA Provider BEFORE You Invest
NDISP only has a design team and facilitates construction of SDA property because the majority of SDA being built is rubbish that is not fit for purpose and will have massive long term vacancy issues. In an ideal world people would bring completed fit for purpose properties to us and we would then be able to be the SDA provider for them.
In reality, we get offered completed properties to manage almost every day of the week. In so many instances:
- They are not fit for purpose for SDA at all;
- Or they might be built to SDA HPS standard but are only IL or FA suitable;
- Their location is terrible etc etc.
In most instances you couldn’t pay us any amount of money in the world to manage the properties. They are just wholly unsuitable. We even see stuff from SDA providers that have completed dozens of properties that are terrible. Most often we just tell people to sell it and build something more suitable. It so often makes us wonder if they have spent anytime with people who live in the properties, or who the actual carers of participants.
While there is limited supply then the cheap rubbish SDA property is still better than what’s been around. But as the market matures those places will be empty. When we look at taking on a property we ask ourselves:
- Could we move participants into this place in good conscience;
- Will it have vacancy issues in 5 years when there is plenty of suitable stuff around.
Here at NDISP we would love for there to be a lot more compliant SDA providers building property that works. We are all about getting people out of inappropriate accommodation and into places they are happy to call home. It is so frustrating seeing the absolute rubbish being built that just doesn’t work. That is terrible for participants and terrible for the poor investors who have bought rubbish.
We are a long term SDA provider, that is we are setup to provide specialist disability accommodation to NDIS participants and for that we need hundreds (if not thousands of properties) to be available. From a commercial perspective our income comes from having occupied SDA properties.
Unfortunately any scheme with government funding and the potential for good returns attracts some interesting people. The Specialist Disability Accommodation space is no different. Asking some questions before you invest can help see if someone is more interested in sales commissions or “fees” from builders than in actually providing an awesome home for someone to live in.
There are so many terrible new built properties that will have terrible vacancy issues or won’t work at all as they are just not fit for purpose. Then there is the way that the providers operate the property, there is so much compliance and the focus needs to be on the participants.
Our articles and information on this are not for the purpose of selling properties, we just want more people building SDA that is great for participants.
1. Can I find my own land and build on it?
One of the easiest ways to spot someone who is more interested in sales commissions than on the long term occupancy of your SDA home is to see if you can find your own land. The marketeer type people typically only sell stuff in new estates where they can get a healthy sales commission on the land.
Now there is nothing wrong with paying a fee for someone to find the land if you don’t have time to do so yourself. The provider should also have strict standards about proximity to shops, transport etc and there is nothing wrong with the provider saying they don’t think a location is suitable. But only being able to buy land or complete packages from then always begs the questions why?
2. What makes your designs better than most
NDIS participants have total choice and control and all pay the same to live in an SDA property. So you can’t get people to live in properties that don’t work or are in terrible locations.
The SDA payments look high, but they need to be to cover all things you need to include and how high the construction cost should be. You don’t get more for a bedroom than the neighbour does for their entire house just by spending a bit more. One of NDISP’s 3 resident high physical support houses in regional QLD gets bank valuations of over $1m. You can’t expect a $500-$600k house and land package to do the same.
Warning signs that the property may not be suitable:
- It’s in a new estate that is a long way from shops, transport etc;
- It’s built to the minimum SDA standards (particularly at HPS level – they are just too small);
- There are not ensuites to every bedroom;
- Robust designs have participants sharing;
- There is no solar system to keep the energy costs of participants down;
- They have tried to keep the construction cost down by making things ready for, or leaving things out, rather than tried to put in everything a participant needs to live there;
- It looks like a private hospital or a facility – grey or blue toilet seats, a ramp out the front that could be on a put put golf course etc.
While there may be exceptions to above, being the norm for a provider raises questions.
3. Do you use property manager or outside real estate agents to manage completed SDA properties?
If the answer here is yes then we would say run away. You simply can’t be a compliant SDA provider and do that. Every single person inside that agency who ever has a chance of seeing your data is a worker under NDIS legislation. They would all have to be inducted in to the SDA provider’s policies and procedures, have worker screening etc etc. Then that organisation would have to form part of the SDA provider’s audit. They would have to have custom software (off the shelf real estate software doesn’t let you hide the tenant’s names – as owner you can’t know who the tenant are – that’s a breach of privacy regulations under the NDIS).
4. Who does the maintenance of occupied SDA properties
Every person who is invited onto the SDA property by the SDA provider is a worker under NDIS regulations. That is every employee, volunteer, contractor and sub-contractor. So the plumber repairing the tap needs to be inducted into the SDA provider’s policies, procedures, be able to answer questions when audited on them, have worker screening etc. The mower person needs to know all of this too, plus everyone needs to know what modifications are required to what they normally do to meet the needs of the participants residing there. This is a massively expensive and labour intensive compliance task to ensure everyone can do this.
5. Do you have “partnerships” with SIL Providers or a Related Company that Provides Care
If the answer is yes, in most cases then this is a flag that your SDA provider is in breach of multiple laws, will have compliance issues in future and will have long term vacancy issues.
SDA is someone’s home, it’s all about choice and control. Having relationships with SIL providers and support organisations is vital, but entering into partnerships, having agreements etc.
Firstly if there is more than 20 percent shared staff, 20 percent shared board members or 20 percent shared ownership then the organisations are closely related and it’s a flag for choice and control.
Any agreement to be the SIL provider for a property etc is a terrible idea from both a business and a compliance point of view. There are thousands of providers, why limit yourself to one. But worse, agreements and partnerships are very much in danger of being:
- a breach of the tenement of choice and control
- considered 3rd line forcing by the Australian Competition and Consumer Commission
From a commercial perspective, having a SIL provider in place before your first tenant moves in just limits who your potential tenants are. NDIS participants already have their own support workers (hospital and nursing home discharges aside), why limit your potential tenants to only the clients of that provider.
Bonus Question – Would NDISP be the SDA Provider for that design when it’s finished?
NDISP does manage properties that they haven’t been involved with at the design stage. Usually at a lower level than the property was designed and approved at. It’s not that there aren’t great designs out there (although they seem to be the minority at present) but great designs in great locations are full and will be full for the long term.
Send your plan and location to projects@ndisp.com.au and ask if we’d manage that property if it was completed.
