Defence Housing – new attraction

Ajay

I have heard their management fees are high, and the leases are long so this can be a bit of a turn off to some people.

What sort of rents would you get on a $500,000 proeprty? Is it market rent or aa bit higher?

Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]

Management Fee is usually 16.5% of rent non-negotiable for the life of the lease to DHA. They do pay for some minor repairs and spruce the place up when they leave though. Not sure I’d be jumping through hoops to sign up for 4% return (before mgmt fees, costs, taxes etc) though – especially with no guarantee of any increase in value.

If the lease is still in place with DHA when you want to sell you may find it difficult to sell – niche investment like serviced apartments. You can get a 4% return by buying a standard property that would be cheaper, and in any suburb you like within your budget.

If you planned on keeping it for 10-15 years I’d say go for it, but 3-4 years doesn’t seem like long enough to gain any advantage.

Dont expect any capital gains of more than 1 to 2% for at least 5 years.

We are all made from Stars.

Hi Ajay,

Like Anubis – I don’t believe your property and timeframe match each other.

Property is generally considered a long term investment and as such buying with a view of making significant gains at the moment is likely to lead to frustration and a goal unrealised.

Without knowing the final details of the property nor your income this property is likely to cost you a great deal of money on a weekly basis.

The numbers I get are quite significant using what you have provided so far and an annual income of $50K (average income in Aus)

Even increasing income to $80K the after tax refund figures are duanting.

At income of $120K the after tax refund figures are still a little scarey.

Derek
[email protected]
0409 882 958
Property investment advice and researched property in quality locations available.

Hi Ajay,
I have DHA leased townhouse in Brisbane and I would not consider another DHA property again. I have it for 8 years and hope to get out soon (lease is for 9 years + 3 years option). It is worry free investment but return is too low. What I am fed up with is rent review process.This year I am getting $270 per week rent minus 15% management fee.Rent is reviewed each year and if I object I have to pay for another valuation to object, which cost between $300-500. Than there is negotiation going between my valuation and their valuation. There is also condition that their rent can by $10 per week less than market value. As I see my situation I could rent this townhouse for between $280 -$300 per week with 5 to 7% management fee on open market but I am locked in the lease or sell and pay big CGT. I would like to keep the townhouse but I don’t like the lease.
Good luck!
Daniela

15% is $55 a week out of your “rent”. Suddenly you’ve invested 475k and getting $315 a week in rent before you pay insurance, rates & land tax.

I have to ask if the stamp duty refund is what has you convinced on this deal?

A 5% deposit leaves you paying around $1400 per f/n on net revenue likely to be $500 per f/n. Can you afford to chip in $900 per f/n ad infinitum between you?