Running a National Disability Insurance Scheme (NDIS) business is not just about delivering essential services; it’s also about creating a sustainable, fulfilling business, which helps to drive your personal goals.

One strategic way to achieve this is by investing in property or businesses that complement your NDIS operations. The right investments can enhance your service delivery, protect your assets, and create additional income streams, all while aligning with your overarching goals.

Below, we cover some of the key benefits and considerations for NDIS business owners when investing in property or related ventures.

Enhanced Service Delivery

Investing in property that supports your NDIS business operations, such as specialist disability accommodation (SDA) or supported independent living arrangements (SIL), can directly enhance the quality of your services. Owning these facilities allows for greater control over the environment, ensuring they are tailored to meet the needs of your participants. It also eliminates the risk of sudden rental increases or property unavailability, which can disrupt your operations.

As your NDIS business grows, having strategically aligned investments can facilitate seamless expansion. For example, owning property in multiple locations can help you expand your reach to new participant groups without reliance on external landlords. Similarly, owning a transport fleet could provide both participant services and additional income from other commercial activities.

Asset Protection and Stability

Owning a property through a properly structured entity can provide significant asset protection, insulating it from the risks associated with your business activities. For instance, holding the property in certain structures can separate the ownership from your trading operations, safeguarding it in case of unforeseen challenges.

Similarly, investing in complementary businesses – such as equipment suppliers, transport services or training facilities – can diversify your income sources and reduce reliance on external providers. These investments often create synergies that strengthen your core NDIS business while offering additional financial security.

Tax Efficiency and Financial Benefits

Investing in property or other businesses can also bring significant tax advantages. For example:

• Negative Gearing: If the income from an investment property is less than the interest and other expenses, these losses can offset your business’s taxable income.
• CGT Benefits: Assets like properties held for more than 12 months may qualify for the 50% Capital Gains Tax (CGT) discount, depending on the ownership structure.

Complementary businesses, when integrated strategically, may also allow for more efficient resource allocation, such as shared staffing or reduced operational costs.

Investment Structuring Considerations

Before making any investment, it’s crucial to consider the structure of ownership. Options such as holding property in a trust, company or self-managed superannuation fund (SMSF) can have varying implications for tax, liability and asset protection. Discussing your plans with a business advisor experienced in property and NDIS matters is essential to getting this right.

Our consultants have assisted many NDIS business directors in taking the next steps in their wealth journey. Through collaboration Lambourne Partners Finance, and our extensive experience with cash flow requirements, we are able to provide a one-stop solution to business and property purchases for business owners in this industry.

Case Study: A Real Client Experience

Mark had become aware of NDIS accommodation opportunities after talking with a close friend who runs a Community Access Business.

After consulting with Lambourne Partners Advisors, Mark resolved he wanted to make an investment decision in a Specialised Disability property in Western Australia. Properties in New South Wales weren’t offering the same kind of attractive returns Mark desired.

After talking through his personal circumstances and the benefits of various ownership structures, Mark decided it was best to purchase his investment using a new discretionary trust. Mark found a four bedroom property and required a loan of approximately $556,000.

The Lambourne Partners Consulting team was able to prepare supporting cash flow information to assist Lambourne Partners Finance in securing an interest-only investment loan for the purchase of the property at a competitive interest rate.

Based on the NDIS Maximum Reasonable Rent & Board Contribution for a Specialised Disability House, Mark is eligible for contracts up to $27,664 per participant, or a total of $110,656 for four full-time participant occupants.

Based on Mark’s annual interest-only repayments of $41,336 per annum, his property makes a positive cash flow return of $69,320 before maintenance, rates and management fees.

How We Can Help You

To find out how our Consulting team can help you and advise on your situation, read more on our services for NDIS businesses here and please reach out to Ben Wilson below or on 02 4969 6600.