Frequently Asked Questions
FRACTIONAL INVESTING WITH DISABILITY FRIENDLY LIVING
Who can purchase a Fractional Investment Property?
SMSF Investors: Those with available cash in their Super looking for better returns.
Young Investors: Individuals with a smaller deposit looking to enter the property market.
Mum & Dad Investors: Families who may struggle to get approval for outright property purchases.
Conservative Investors: Those preferring a smaller financial commitment.
Diversified Investors: Individuals wanting to spread their investments across multiple properties, e.g., 5% in three different properties
What is the minimum investment amount?
The minimum investment starts at $70,000, which grants a 5% ownership stake in a Disability-Friendly Living Property.
How many investors are involved in a Disability Friendly Living property?
Disability Friendly Living retains a 65% ownership stake in each property, leaving seven 5% shares available for purchase. Therefore, up to seven individual investors can participate.
Who pays the stamp duty?
Investors are responsible for paying stamp duty based on their percentage ownership of the property.
What if I want to sell my share?
Disability Friendly Living has the first right of refusal if an investor chooses to sell their share. If they decline, Disability Friendly Living can assist with the sale for a flat fee of $5,000 + GST.
Can an SMSF purchase shares with cash?
Yes, all purchases must be made in cash. The property cannot be leveraged as security. SMSFs can participate by purchasing a share directly.
Is it easy to secure financing for an SDA property?
No, financing for SDA properties can be challenging. These homes must meet rigorous design standards, which significantly increases their valuation compared to standard properties. Specialized lenders familiar with SDA investments are often required.
What is the deposit amount?
An initial $2,500 Expression of Interest (EOI) deposit is required. Once this is processed, contracts are issued, and the remaining deposit is payable at the contract exchange.
How long does it take to build an SDA home?
The construction of an SDA property typically takes 8–10 months, depending on industry conditions. The process includes land settlement, deposit payment, and building approval before construction begins.
How often is rental income paid?
Rental returns are distributed monthly to investors. Payment can be made either within or outside of super, depending on the investor's preference.
Who do I contact about selling my share?
Reach out to the Disability Friendly Living team for guidance on selling your property share.
Can I purchase more than a 5% share?
Yes, investors can purchase multiple shares if they have sufficient funds or diversify by purchasing single shares in multiple properties.
What is the typical lease duration for an SDA property?
Lease terms usually range from 12 to 24 months. Participants often stay longer due to the customized nature of the accommodations and the stability provided.
Can a Disability Friendly Living property be used as security for finance?
No, these properties cannot be used as collateral to obtain financing..
How long does the tenant-matching process take?
Matching a tenant to an SDA property can take approximately six months, as it depends on both the completion of the participant’s NDIS plan and the property’s readiness.
Can 100% occupancy be guaranteed for SDA properties?
No, similar to traditional rental properties, occupancy cannot be guaranteed. However, the NDIS provides up to 60 days of vacancy payments while a new tenant is being sourced.
What happens if an SDA property becomes vacant?
Participants may leave at the end of their tenancy. However, the stability of SDA accommodations often means participants prefer to stay long-term. During vacancy periods, the NDIS offers financial support for up to 60 days
Can I live in a property I’ve invested in?
No, due to the investment structure, investors cannot reside in the property.
Can any real estate agent manage an SDA property?
No, SDA properties must be managed by a registered SDA service provider. These providers ensure compliance with NDIS regulations and oversee tenant placement and property management.
How are SDA rental payments structured?
SDA rental income comprises multiple components:
SDA payments from the NDIS, invoiced monthly in arrears.
Participant contributions from sources such as the Disability Support Pension (DSP), Pension Supplement (PS), and Commonwealth Rent Assistance (CRA).
Who handles property maintenance?
Participants are responsible for routine maintenance, while investors manage specialized systems such as smart assistive technology and solar infrastructure. Garden and lawn care can be negotiated with tenants.
Who pays for utilities?
Investor Responsibility: Connecting the property to the NBN.
Tenant Responsibility: Ongoing utility costs, including power, water, internet, and phone services. Solar systems often reduce electricity expenses.
Do investors pay for property maintenance and repairs?
Yes, each owner contributes to maintenance and repair costs proportionate to their percentage ownership.
How do I stay informed about my investment’s performance?
Investors will receive monthly statements and inspection reports to monitor the performance of their property.
What types of properties are available for investment?
Disability Friendly Living focuses exclusively on building NDIS SDA homes in high growth areas. These properties are managed by Australian Disability Homes and are designed to deliver rental returns of up to 12% per annum. *
How do I stay informed about my investment’s performance?
Investors will receive monthly statements and inspection reports to monitor the performance of their property.
Is there a rental guarantee?
Yes, an initial three-month rental guarantee is provided at 11% if a tenant is not secured within this period. After that, rental income reverts to the amount received from the property.
What are the tax implications for investors?
Tax obligations, including income tax and capital gains tax, are the responsibility of the entity that owns the investment property.