hey just looking for some feed back or advice on Defense housing property investing from people wo either have done it or or got this investment or hav more info on this
I read in the money magazine feature that is is a good investment as rent is guaranteed and they replace anything and do a bit of clean up with painting etc if needed before the contract is over and property handed over. And there was this couple who had bought two properties alredy and was happy with it
any views or tips or advice.. thinking about property appreciation ?/ etc
Regards
jeff
You pay high property management fees and the properties are often not in first class locations. There fore your capital growth could be limited. Frankly with high Tennant demands across Australia I think there are better options.
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The property management fees are also very high…….18% from memory!
I’ve looked into this but for the reasons above the numbers didn’t stack up for me.
It depends on your goals – if you are after a worry free investment ie low risk with consistent income, then go for it. If you want a property that you can learn from go for a mainstream ip.
You are paying a premium in many cases for this type of property yet your returns are limited however the trade off is maintenance, vacancies etc are all looked after in the management fees charged.
You might consider something like this inside a smsf for the stable cashflow.
I dont like the idea of high management fees and also no property appreciation due to its location ..so it s looking even less attractive to me now
I suppose if i had lots of cash to spare then i would look at it just to diversify the portfolio
Looking at today's Financial Review, they had wild projections of 15%+ total over the next 3 years for locations like Darwin – Defence Housing is big up there and if there is growth to be had you might want to be part of it.
That surely a plus point in its favour,
wish i had the spare cash
I looked into them a while ago but found that apart from the high fees, the price of the property is at a high premium. I ended up buying the same type of house for nearly 50K less. As long as you due your homework you shouldn't have any issues with vacancies. I think they are a great idea for people who are after hassle free property investing and are willing to pay a bit extra but that just isn't me at this stage anyway. All depends what you are after really?.. From your comment above about the spare cash I think you should do your homework and buy one on your own to help save those extra dollars!
Sometimes you come across DHA houses for sale on real estate sites with a few years of the lease remaining that are quite reasonably priced, but I'm not sure if you can negotiate price or not.
Also Occasionally Defence Housing sell them on through there site with a few years on the lease remaining and the lease extension option
Could be an alternative to buying new if you are interested.
Mystery
Got some good deals on established DHA houses where the original owner paid far too much, as other posters have mentioned the deal needs to make sense on it's own, forget the new carpet and lick of paint at the end of time.
Also.. vacancies are one of the horrible imaginary threats that newer investors see with property, with insurance and a property in good condition and location it's hardly ever a concern with residential.
Not quite 18% at present as this I have just read on their website
The service fee is calculated as a percentage of the rent and varies depending on the property type: they charge 16.5% (including GST) for freestanding houses.
Shedin
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