Episode 9: Navigating NDIS: A Comprehensive Conversation with Glenn Rodricks (NDIS expert)

In the ninth installment of Season 1, The Property Now Podcast delves into the complex and crucial world of the National Disability Insurance Scheme (NDIS). Our esteemed host, Matt Ellul is joined by a distinguished guest, Glenn Rodicks, an NDIS expert with a wealth of experience in navigating the system's intricacies.

As the episode unfolds, Matt Ellul and Glenn Rodricks engage in a compelling conversation, breaking down the nuances of the NDIS and shedding light on the essential aspects individuals and families need to understand. Listeners can expect an informative and insightful exploration of the eligibility criteria, application process, and the array of services available under the NDIS umbrella.

Glenn Rodicks brings a unique perspective to the discussion, drawing from his extensive background in the field. As an expert in the NDIS, he shares valuable insights into the challenges people face when seeking support, as well as tips and strategies for optimizing the benefits provided by the scheme.

Throughout the episode, Matt Ellul and Glenn Rodricks address common misconceptions surrounding the NDIS, offering practical advice to both newcomers and those already enrolled in the program. The conversation touches on the importance of personalized planning, understanding funding categories, and maximizing the potential for positive outcomes.

Listeners can look forward to real-life stories and examples that highlight the impact of the NDIS on individuals and families. The goal of this episode is to empower the audience with knowledge, equipping them to make informed decisions and navigate the NDIS landscape with confidence.

Join us for Episode 9 of The Property Now Podcast as we unravel the complexities of the National Disability Insurance Scheme with Glenn Rodricks. Whether you're new to the NDIS or seeking a deeper understanding, this episode promises to be an invaluable resource for anyone touched by the world of disability support services.

Transcript

Speaker 1 (00:01):

Welcome to the Property Now Podcast, where we talk all things property, investment, and new homes with your host Matt eol. Speaker 2 (00:09):

Yes, there's bad debt. Yes, there's good debt. The good debt is not bad. It will never send you broke. Ever rich people rely on debt to expand because without debt it's pretty hard to expand. It's almost impossible. Speaker 1 (00:20):

If you want to learn more about what's happening in the market and how to benefit from property investment, then go no further. We dig deep as to why our sector is a key to building financial security and safety for your family. Never before has it been more important to understand the playing field than now. Speaker 2 (00:39):

And I would say this, this is probably going to raise some eyebrows with some people, but your family home is not an asset. It is a liability. It's taking money out of your pocket from a cashflow position. Speaker 1 (00:49):

So let's get on with the show. Happy listening and we'll see you on the other side. Hello, Speaker 2 (00:54):

Hello and welcome to the Property Now Podcast. I am very excited today because we're talking about a topic that is close to my heart and something that I believe in very deeply, and that is the National Disability Investment Scheme, which is NDIS for short. And I am very, very honoured to introduce an expert in this field. He's going to share a little bit more about himself, but he goes by the name of Glenn Roddick and Glenn has come on board to consult for BioFire Property Group to help us get up and running in the NDIS space. It is quite a complex scheme to be fair, but this man knows more about it than anyone I know. So I'm very glad to have you on the show. Glenn, welcome. Speaker 3 (01:35):

Thank you, Matt. Glad to be here. And it's good fun to actually talk about something that's close to my heart, which is investment and I'd love to point people in the direction of high yield investment, and that's really why I came on board with you guys because that's the synergy we have together. Speaker 2 (01:52):

No, I couldn't agree more, mate. And you do have some past history. Great man, Bob Hand, who comes on the podcast every now and again. You used to work for him at Oliver Hume a long time ago. Speaker 3 (02:02):

Yes, 1997. In fact, when I came to Australia, the first company that I was interested to work with was actually Oliver Hume because looking at the southeastern suburbs, Matt, there was nothing else but homes popping out of the ground. And I wanted to get involved with this business and therefore someone pointed me in the direction of Oliver Hume and they had an office in Hallam, and Bob was then the manager of that office, I think, and I joined them. Michael Duster was the guy who interviewed me and they trained me. I really loved it. And that love for property and investment still continues today. Speaker 2 (02:43):

Yeah, that's great mate. So why don't you tell us a little bit about your experience across the board in Property Investment, because you've been doing it for a long time, obviously at Oliver Hume since 1997. Gives us a quick snapshot of your experience, mate, and then we'll get into the NDIS stuff. Speaker 3 (02:56):

Okay, as a snapshot. Well, as I said, started off with Oliver Hume, learned all about land and I realised back then that everything in Australia was about finance. It was about having the banks on your side, understanding how banks taught and understanding the way they perceive a client. I think that was the foundation, which I learned from the Oliver Hume days. And from there I then took it further to actually, we started our own business and it was a building company, but at the time we realised finance being the key. So we actually bought our first franchise and the only thing that we could buy in those days was Mortgage Choice franchise or an Aussie franchise. And what attracted me to Mortgage Choice was the multiple lenders that they dealt with. So therefore we bought the first franchise and ended up owning the largest number of franchises in Australia.
(03:50)
We own all of the franchises in the southeast suburbs. And then from there, using that finance knowledge is where we actually started to invest and ran different types of investments for clients, for our family, for ourselves, and never looked back and realised that the only way that you could actually become wealthy was if you invested into property and you watched it grow. And I love to see the way property has grown across Australia, especially in Victoria, where you've got this massive amount of land that keeps getting developed and there's more and more estates and there's more homes coming out to the ground. And it just amazes me as to how people can actually enter into this property market with very little bit of money and then at the end of 10, 15, 20 years, they're actually millionaires. And that's really been the journey. So we've worked with moms and dads to take them from their first home to multi investors, and that's something that I say with a lot of pride because I love to see people who actually then have that financial stability in 10 to 15 years after they've met us and done it for my family, done it for my sons, done it for myself.
(05:03)
And that's been fun. It's been a great journey. Not every investment worked out perfectly, but there were times occasionally where it was not the best, but I think 95% everything was so good. That's the snapshot that I can give you. Speaker 2 (05:16):

Yeah, that's amazing, mate. Look, I think we share very similar passions in this space and obviously why we've aligned a couple of things that you pointed out there. Property being such a great wealth creator, property value residentially has just topped 10 trillion again in Australia. It's the largest owned asset class by a mile. Second being superannuation and people becoming millionaires from acquiring properties they really don't need to do much with, and I think people tie their income to their wealth quite often and the income is very hard to become wealthy off unless you use that income to leverage into assets like property. Speaker 3 (05:51):

Absolutely. Speaker 2 (05:52):

Or business or shares or whatever, but property's the most well known and probably the safest as which Speaker 3 (05:57):

Is good. True. Absolutely true. Speaker 2 (05:59):

That's great, mate, Luke, it's a great history and I didn't know that you owned all of those franchises, so there you go. I learn things in these podcasts all the time as well, and that's cool. We're here to talk about NDIS. You've obviously put a fair bit of time into understanding NDIS. There's a lot to unpack with us. Why don't you give us a bit of a rundown as to firstly what it is, then we can sort of unpack that in more detail. Speaker 3 (06:21):

Absolutely. To start with, NDIS to me was this very mysterious terminology that people used and I was curious to know what actually was the background of the ndis. I started to read a lot about it and there is a huge amount of data that's put out there from the government and it's actually very well put out, but it's complicated. The first stage of NDIS was to understand the actual national disability insurance scheme to understand exactly why it was put in place and what was the fundamental thought behind it. Then I realised that the fundamental thought also included property because from my understanding of the NDIS fundamentally it is to take a disabled person who could presently be living today far below the standard that any one of us lives and is living in possibly an old age home. You could have a young person in their twenties who's living in an old age home purely because the old age home is the only facility that can cater to his needs.
(07:23)
Or you've got people in hospitals where they should be discharged a long time ago, but they don't have a home to go to. And I think the SDA, the specialist disability accommodation, that department wants to bring people who are disabled into the community and that is very attractive and because you're actually investing in two things. One, you are investing in social gains and the other is actually in your personal wealth and that attracted me a lot and I think that's the background of NDIS and as long as people keep that as the closest to their heart and not see it purely as an investment vehicle, but see it as also a social gain that you're actually doing something fantastically good for somebody who's going to look at that home and stay in that home and consider that home to be their home for life, it's going to be the home in which they see themselves for the next 10, 15 years.
(08:13)
That's the little research that has gone into it because keep in mind NDIS is new. It only was introduced in 2013, it's being rolled out across Australia since 2016. Homes are now being built new homes and therefore it's all new surveys that have been done. People who live in a new brand new NDIS home, an SDS home are people who view it as their home for life and as an investor, I don't think you can ask for a better combination. You've got social gain, you've got people who want to live in your home for life and you've got good returns. Speaker 2 (08:46):

I think the social gain is a really important component to this hearing about people who do have needs, who have disabilities physically or mentally living, like young people living in age care centres. Maybe they love it, maybe they don't, but they deserve their own space, their own home. Look, I agree. I sold a lot of government scheme called nras, which was a national rental affordability scheme years ago and that was a great scheme as well. It was for people with financial limitations as far as what they earned because rentals were expensive and it was a really successful scheme. They discontinued it in the end, but it was just a great scheme that helped a lot of people. Investors included the recent pricing review. It's a big thing and I think it's important to highlight. Obviously you said there's a lot of information around NDIS. The pricing review that came out recently was about 65 or 70 pages I think. Speaker 3 (09:35):

Yep. It was a big document, Speaker 2 (09:38):

A lot of information to unpack. I've gone through it and absorbed a lot, but I feel like every time I read it I get something different. What did you find out of that mate? Speaker 3 (09:47):

What I took away from that is that after the last couple of years of SDA housing specialist disability accommodation housing, they have identified in their report that the easier home to tenant is actually a two bedroom home or when I say a two bedroom, it's a three bedroom home with two participants. That means two people who are living in the home who are disabled and the third room is used as a carer's room. Now they've realised that that's the easiest way to tenant these houses because trying to get three people into a home who are unconnected with each other is hard. So two people living in the same home, disabled people with a carer is the best and therefore the review actually increased the yield or the subsidy incredibly high for the two bedrooms and that's what a lot of investors don't know and those who do know about it are getting into this market and I feel that the reason I'm passionately working with people like yourself, Matt, is that I think there's a lot of misinformation and people just look at the numbers.
(10:50)
They are presented with incredibly good yields and based on that incredibly good yield number, people make a choice to invest and I think that's a little bit shortsighted because you need to know a lot more about this investment before you actually jump in. And that's where I think Matt and myself, I mean both of us have been working is to find the right amount of information that the client walks away with good knowledge but doesn't get scared. It's that balance because it is for a mature investor, it is for people who understand that this is not just to make money. You're actually looking at choosing the right property in the right area, in the right location and making sure that you're looking at demand maps and all these things that these resources are made available by the NDIS for investors. And I think the background of the N ds is that now instead of the government trying to build homes, if they push or if they promote the N DS SDA subsidies, investors will come in and do the job that the government is finding hard to do today. Speaker 2 (11:51):

Yeah, I think when we explain how it works on a high level to investors that we first connect with, there's definitely an element of this sounds too good to be true. Absolutely. There must be something wrong with this. We've read an article in the news that said that this is dodgy. It's a pretty common sort of response, but I think when you do explain the need for it, please don't quote me on the exact numbers, but my understanding is that it's a ridiculous number that it's costing the government per year it's $3 billion or something along those lines to house all of these people that are eligible for these homes but don't have access to these homes. They're not built. You couple that with the government then being reliant or being responsible for building all of them themselves, it's just too much. It's too hard to do. So they've privatised it. They've obviously created this scheme that subsidises the private sector and it's a much more cost effective way for them to do that. So when people have this approach, I think when you unpack it, it's a little bit easier to understand. Speaker 3 (12:52):

I think the motivation to get into an SDA investment is, there's two types of investors. One is the investor who's coming in in the mid forties. I think those sort of investors are the ones looking at the 20 years of good yield in which they will pay off their own mortgage first and then have a good cash component and then have a lot of equity in the property. So that's one. The other type of investor is the ones who are in their mid to late fifties who are looking at retirement. These are the clients that we've been selling to or advising on, is that people who actually look at buying at their 55 to 59 is the oldest client I have so far, but their plan is very simple. The husband wants to now stop working over the next three to four years, and therefore he will now have an ongoing income stream, which could be in the range of between 70 to $90,000 depending on the type of home per year Speaker 2 (13:47):

After expenses, Speaker 3 (13:48):

After expenses, and that's after you've paid your mortgage at 90% mortgage. In fact, they have, and they've actually paid all the expenses to maintain the house and to pay the SDA provider, and they still come up with about 70 to 80 to even $90,000 and the mortgage is paid now. That's a very good strategy moving forward for retiree when it's for the younger people, they look at it as multiple properties, which is to buy one and then in a couple of years time look at buying another one so that they could actually supplement the income where the wife can stop working. Actually, the lifestyle doesn't change. I do see another area where younger people who are in their, I would say their high income earners could be they're young, their wife's having the second baby and wants to now stay home for a couple of years or stay home for five years after the child is born. Now this gives them a fantastic income stream because they can actually earn 70 to $80,000 a year after all expenses and supplement the income that the wife's not earning while she's looking after the baby at home. Speaker 2 (14:52):

Yeah, it's incredible. And when you do get creative with it, I'm not a financial planner, so I need to be careful with what I say, but obviously when you generate an extra income of that nature, it can then be used to leverage into paying off debt that doesn't give you that kind of return family home, for example. I've always been a big advocate of your family home being a liability. Absolutely. I believe it's an asset. It can be used to acquire assets, but in essence it's a liability. So that's a very powerful thing. I mean, you're bringing on a full-time wage. Speaker 3 (15:21):

Absolutely. Speaker 2 (15:22):

And a lot of the time the people that we're helping acquire these properties, they're not actually partying with their savings, they're partnering with equity. We also have access now to using superannuation products that allows this to happen. It's a pretty powerful thing and that's why I do encourage people who feel like they may be able to do something to at least speak with someone, hopefully us, but someone. So why don't you tell us about the funding on these. There's more that I want to unpack with this, but what kind of financing requirements are involved with getting Speaker 3 (15:50):

Into an NDIS see to finance an NDIS home? You can either go to a commercial lender, which is any of the major banks, and they will treat it as a commercial, different rates, different reviews dates. They will actually fund it interest only for a couple of years and then review the rates every two years. They would need to have substantial equity to actually, because they wouldn't lend more than about 55 to 65% possibly on a commercial loan. I was talking to CBA yesterday about it in fact, and they said that they would only lend 55% for an NDIS property, an SDA home. But if it was coupled with a very strong owner occupied home with good equity in it, then possibly they'd go up to 70 to 80%. That's possible. But on the other hand, you also have a Columbus capital whose specialist lender who actually then lends only for NDIS and SMSF loans.
(16:47)
I think they manage a portfolio of about $9 billion now they will lend up to 90%, so that's pretty incredible. Now, that to me is very important when you're talking to an investor who's risk averse and he's worried about risk. If a lender is willing to take you all as a 90% lend on an SDA property using the rent, by the way, they use the full rental yield, that means the lender is very sure that the interest will be paid by the subsidy. That means the subsidy is really in place and people who have worries about it will the government withdraw the subsidy and all these things. This is a legislated scheme and it is funded by the Commonwealth and the states, and therefore it's not something that they can withdraw. It's the second largest expense social expense of the government. $39 billion is bigger than Medicare and it's bigger than age care. That's the amount of money NDIS is costing the government. What's the Speaker 2 (17:42):

Biggest, is it welfare? Speaker 3 (17:43):

It is, yes. Basically welfare being one. Then Medicare, then age care NDI is here to stay, and when the lender is taking it to service the loan, they're actually using the income to service the loan. That gives me the comfort to know that the lender would not be constable if they actually knew that this rent is going to stop or this rent may suddenly cease, or you have lengthy periods of time when the house is not occupied because they're using the rent to service the loan. And that's very powerful Speaker 2 (18:12):

Post Royal Commission as well. Obviously funding is very heavily regulated and banks need to be seen to be providing, I dunno what the right term is, but responsible lending. Responsible Speaker 3 (18:24):

Lending, yeah. Speaker 2 (18:24):

Yeah. It gives me a lot of confidence. Yes, absolutely. To do that as well. It's really encouraging. Why don't you unpack the government funding for us, so obviously, how does the actual property get paid? Because there's two components. Speaker 3 (18:36):

Yeah, there are two components to that. The first component is actually a standard lease. When you own a specialist disability accommodation, what you really own is a home that is being built for a specific type of disability. Now, the people who are going to live in this home would be two individuals possibly. Each one of them has a lease agreement with you, and that lease agreement is under the standard Victorian Tenancy Act, so it's not something outside. It protects the investor, it protects the tenant. There is additional little bit of protection which is there for the tenant, which is, I think it's clause 12 A, which actually says the landlord can't easily evict and I think no landlord would want to evict a disabled person from his home for any reason other than very, very serious crime. So therefore there is that protection. Basically, there's two tenancy agreements that you're entering into.
(19:29)
These tenancy agreements are each one of them is paying you $10,912 per year, which is the minimum reasonable rental contribution, which is dictated by the SDA. So they're the ones who come up and say it's reasonable for a disabled person from his pension to be paying $10,912 for his room. So you are getting 10,912 into two rooms. Then once the room is rented, the subsidy is given to the landlord, so the subsidy is calculated and it's put in place for any new home for a period of 20 years. That room will have the subsidy as long as there's a tenant in that room, and the subsidy could be for improved livability. It could be from 45,000 up to $85,000 for a high per room based on the disability. So if it's high physical support or robust, they would have a higher subsidy than for improved livability or fully accessible. Speaker 2 (20:22):

Cool. Why don't you explain the four different types of ND? Well, Speaker 3 (20:26):

There are four different categories of homes. One can build, you can build improved livability, which is the home in which normally you could have up to three people, so it would be a four bedroom home with an overnight carer, so that's one bedroom goes there. The other three bedrooms can be rented out individually to people who are classified as improved livability. Now, these homes are specifically built for that purpose and would yield about in Victoria, we're talking about Victoria. These are not numbers that you should use, but they're actually calculators that we use to actually find out exactly what it is. It differs from a location suburb, southeast west, north regional, but from about $45,000 per room is the subsidy for improved livability, and it goes to fully accessible. It gets a bit more there. Then it goes to robust and to high physical support.
(21:16)
Now, robust is a special category. Of course, you can't mix robust with anything else because a robust is for people who have possibly something to do with behaviour. They have problems with behaviour, and they need specialised homes in which they would have possibly a more robust, as the name suggests, robust, it's a more robust home in which the home can take more knocks, and if the client or the tenant gets a bit violent into whatever, it always has separate areas where the actual person can break out and go to another room. They have breakout rooms, they have courtyards where he can go out and maybe have a smoke or whatever, and he's got an overnight carer there in the house. You see, that's the robust, you can't mix that with anything else, but you can have high physical support, which is the highest level, and that can accommodate someone who's got improved livability needs, fully accessible or high physical. Speaker 2 (22:07):

So tell us a bit more about that, Glen. So what kind of things are we seeing, firstly, what things do people need in these homes? Speaker 3 (22:14):

Well, at the high physical support, the main requirement is that the house has to be designed and structurally built in such a way that the bedrooms can take in the ceiling, that the actual trusses can have hoist attached to it so that a hoist can be placed over the bed for the high physical support tenant who's called a participant, and that person can be lifted on and off the bed. The bathrooms are specifically designed, that's the only part of the home that looks like a hospital is the bathroom, the heights of all the wash basin and the toilet seat and all that are different to accommodate somebody on a wheelchair. The kitchen is specifically designed where you have some part of the benchtops are movable. You've got gaps in the actual cabinetry where a wheelchair can wheel in heights of appliances are different. The floors are specialised. They're actually non-slip, hybrid timber flooring, air conditioning through the whole house. Each room is specially zoned. It costs a lot more to build an SDA high physical support home, but the subsidy is in line with the cost because the subsidy for a high physical can range from about $70,000 to about $90,000 per room. That's basically why the subsidies there, because the government recognises that it costs more money to build these homes. Speaker 2 (23:31):

People talk about risk, and you look at traditional investments, especially in Melbourne, it might cost you $700,000 to generate a $500 per week rental income here in Melbourne. In certain parts, it might be a bit higher in other parts, but that's a third of the subsidy of one room in one of these properties, and it's not assured, the tenancy agreements aren't really in favour of the landlords anymore, unfortunately. I mean, and you've got to assess risks. It's totally fine. Of course, there's risks in every investment, but I mean, what's the risk of not investing is what I usually ask, but you're generating multiple streams of income under one roof as well. I mean, we have another range of homes that we've just worked very hard on designing, and we have released it, and that's our multi live range, and that's housing multiple tenants under the one roof with specially designed homes. These are just normal tenants. There's no disability or anything, and that generates a much stronger return than a traditional property. So I think understanding investment moving forward and utilising opportunity to increase the value in an asset is something that people need to start thinking about. Speaker 3 (24:31):

Absolutely. Speaker 2 (24:31):

Absolutely. Hence why we're pushing this. Speaker 3 (24:34):

Yep, exactly. Speaker 2 (24:35):

It's very powerful and why don't you just finishing up. We're generally try and keep this to about half an hour. This has been really insightful, Glenn. I'm very grateful. I'm sure the listeners are too. Just a quick snapshot around process, so obviously what I'd love for you to just touch on is quickly the SDA, the SIL, the investor, the builder, how does the process work on a high level, Speaker 3 (24:54):

Try to understand this without looking at a graph or some visual aid? Look at it like this, that the NDI is the goal to actually bring disabled people back into the community to live in a normal, nice, beautiful home, just like any suburban home. The SDA is the department that is responsible for specialist disability accommodation, as the name suggests, there are specialist disability providers out there who as a landlord, if you build one of these homes, you would need to appoint an SDA provider to actually look after because the management agreement is not with the real estate agent like it is today with the traditional investment. It actually is with the SDA provider. So the SDA provider enters into a management agreement with the owner of the property, and therefore we help you with that. By the way, we actually do work with different SD providers and we make sure that we link you up.
(25:46)
We don't leave you out there with the home wondering who do you talk to next part of our process is to actually bring the SDA provider into the process at some stage, so once we have a client who's made the commitment and the actual house has reached a permit stage, and now the house is definitely going to be built, we have a tentative deadline for the completion. This is when the SD provider is bought in. At that time, the landlord starts talking to the SD provider management agreement is signed up, and the SD provider is proactively looking for a tenant for the next six months because it's going to take 24 weeks to build this home, and in that 24 weeks, we are not waiting for the keys to be handed over to the landlord. We are actually going to start looking for a tenant, so the SD provider is advertising this and networking it and talking to specialist independent living providers so that they can actually start placing tenants in place for your home.
(26:41)
The process is quite, I think as long as you work with us and we work along with our owners in a way that they have all the support that they require to actually have a successful home at the end of it, I think the risk is mitigated largely. It's only when you don't have that proactive six months, that's when the owners start to get worried that, listen, my home is ready. Now I have this huge mortgage because it's an expensive $900,000 project and you've got this massive mortgage, and if there's no tenant in the house, then that is a problem. We want to take that away by starting six months ahead. Speaker 2 (27:18):

No, that's great, mate. Look, it's been really insightful. I think bringing you on board into our business has been an eyeopener. We're very grateful for that. Thank you for sharing your insights and your knowledge in this space. I think for everyone listening, if you've got questions, then please feel free to send through your questions. You can send them to my email to start with, which is Matt MA t@bayfairproperty.com au and hopefully Glenn, I would imagine would be okay to answer them. Absolutely. Is that okay? Throwing you under the bus there? Speaker 3 (27:47):

No problem at all. Speaker 1 (27:48):

Thanks for listening to The Property Now Podcast with Matt elo. We hope you learned something valuable and enjoyed the show. Should you wish to reach out to us, you can do so by calling 1 302 8 9 3 2 4 or you're welcome to email matt@hellobayfairproperty.com au and he'll be more than happy to help. However he can. Have a great day.