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Considering investing in NDIS housing?

Many private investors are realising the potential rental returns of NDIS property. But did you know you have multiple leasing options, and this decision could be the difference between a successful investment and a total flop?

You have two options when leasing your NDIS/Specialist Disability Accommodation (SDA) Dwelling:

  • Head Lease, or
  • Traditional Lease

When comparing the two it’s a matter of risk versus reward: so how do you know which is right for you?

This article compares head lease Vs traditional lease NDIS, and explains how this decision impacts your investment. We’ll discuss the role of the SDA provider and how to be more involved in your SDA investment.

What is the Difference Between a Head Lease and a Traditional Lease?

Choosing which leasing arrangement to enter into can mean the difference between profit and loss. A knowledgeable financial advisor can inform you of the best actions for your unique situation.

In a traditional lease set up, the SDA provider would take the place of a property manager, finding tenants (NDIS participants) for your property.

You – as the property owner – accept responsibility of all maintenance costs, insurances and council rate payments.

Traditional lease arrangements can benefit the NDIS participant, as they have more flexibility to negotiate lease terms, rent and other conditions directly with the property owner.

In a head leasing arrangement, SDA properties are leased from the owner by a legal body such as a NDIS Services Provider or community housing provider. That legal body becomes the middle man – assuming all property management responsibilities and payments and sourcing suitable tenants – for a cut of the profit.

A headlease arrangement removes vacancy risk and the potential financial consequences of low occupancy: it keeps your rental income consistent. The legal body would pay a fixed rental income to you of around 8% over a pre-determined amount of time and then sublease the SDA property on your behalf.


Important to note: In high occupancy situations, the legal body will profit while your investment returns stay fixed to the agreed upon rental income.

Why Does This Matter for NDIS/SDA Housing Investment?

Investing in NDIS housing can be tricky business. To get yourself into Specialist Disability Accommodation you must adhere to strict SDA rules, and the success of your investment stands almost entirely on occupancy.

The type of lease agreement you enter into MATTERS.

Let’s go over the risks:

In areas where there is over saturation of SDA property you run the risk of vacancy, which burns up dollars. In this situation, having head leases would safeguard you against potential loss, as it would be the legal body who bears that risk.

On the other hand, if you choose an ideal SDA property and have consistent high occupancy, you will likely see stronger investment returns under a traditional lease agreement.

Knowing the demand in any given location is important, as is specifying your goals of SDA investment. Expert financial brokers are able to guide you in the right direction on both of these crucial matters.

Why is Leasing an SDA Property Different to the Private Rental Market?

The actual leasing component of SDA accommodation works similarly to that of the private rental market.

The primary difference is that you must go through an SDA Provider, or register to become one yourself.

In order for your property to be registered as an SDA dwelling and claim SDA payments it must meet the SDA Design Standard.

SDA dwellings are intended to house people living with a disability with high support needs. As such, these properties must be built in a particular way with specialised amenities and equipment, which could include items such as ramps and ceiling hoists.

All SDA dwellings must be registered under at least one of the 4 categories of SDA Design:

  1. Improved Liveability
  2. Robust Construction
  3. Fully Accessible
  4. High Physical Support

For more information about the SDA Design Standard read the SDA Operational Guideline.

Understanding SDA Providers in Leasing Agreements

With SDA investment property, the lease agreement is between the SDA provider (yourself or a third party) and the tenant.

The SDA providers’ role includes:

  • Enrolling the property as an SDA dwelling
  • To ensure compliance with NDIS requirements
  • Finding an approved and suitable tenant
  • Manage maintenance and repairs

It is important to note that SDA dwellings cannot be switched between different SDA providers, should you have any issues. If you wish to change providers, you must cancel the SDA enrolment, and the new SDA provider must submit a new SDA enrolment [1].

What is a Standard Lease Term for NDIS property?

An initial lease will likely be between 12-24 months. Note: SDA participants are carefully selected based on a number of factors, including proximity to family, friends and employment. For these reasons, most tenants choose to remain in the one dwelling indefinitely.

Can You Become an SDA Provider to Lease Out Your Own Investment?

Yes, you can!

You can skip the middle man, and pocket that additional 10% plus of rental income, by becoming an SDA registered provider. In this case you would be accepting additional responsibilities, including ensuring compliance, sourcing and managing tenants, and enrolling the property as an SDA home.

To register as a provider or enrol your SDA dwellings, go to the SDA Registration and Enrolment page on the NDIS website.

What is the Best Leasing Option for NDIS Investment?

That comes down to your own personal circumstances and what you hope to gain from SDA investment property. Choosing a traditional lease or head lease agreement has pros and cons that should be weighed up; it is a good idea to talk to an experienced financial advisor early on to understand your potential outcomes.

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The leasing arrangement plays a big part in potential profits from NDIS housing investment. Understanding the pros and cons of both options will help you make an informed choice.

To summarise:

  • Traditional leasing could get you higher rewards, though at a higher risk.
  • Head leasing will get you lower, though steady, rewards with virtually no risk.
  • Like with any investment, deciding which option suits your personal circumstances is key.
  • Trusted financial experts are here to help you make informed choices on your SDA housing investment. Get in touch today to talk about NDIS investing.

Disclaimer: This article is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered Australian legal practitioner or financial or investment advisor.  


[1] NDIS, 2024. SDA Dwelling and Enrolment Vacancies,

[2] NDIS, 2023. Specialist Disability Accommodation,

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