Hi all, just wondering if anyone has any experience or opinion on DHA investment properties. They charge 16.5% managment fee, guaranteed zero vacancy for term of lease, paint inside of house after 6 years and replace floor coverings, and the rent they calculate at start of lease is the guaranteed minimum throughout the term of lease.
Interested to know if anyone has any experience in DHA property or advice.
Thanks
Mark.I've never owned one, but when I was in Darwin where there is a lot of DHA Housing, my friends said that it can be hard to sell a DHA property as you have to find an investor only as the lease is still in place… so if there is still a couple of years to go & your life changes & you need to move on, it can be a little difficult sometimes… not all the time of course. other than that… the security of payment is good.
the 16.5% is a bit rich… i suppose really you're paying for your own painting & floor coverings etc in the long run??
Do a search for DHA and find a huge thread on it.
Ciao,
Hi Mark,
I am in the process of buying my first investment property and decided on going on the DHA one. The property is in Medowie Newcastle and is is currently returning 5%. I know with the DHA it is a a bit inflexible but I guess with the trade off I on secured tenants, I am willing to take my chances!
Cheers – Bala.
I live in a street full of DHA properties, no one can sell them here in Medowie, the rent is poor and the outgoings high, yes you pay for your "free carpet and repaint" with those fees. As an ex military person, we know they are all not a great investment. You can find much better with a bit more research. Prices in Medowie are fairly flat atm, it went thru its huge price hike about 3 years ago.
Great Feedback there HGwells – good to know of a real example like that.
I toyed with the idea a year or two ago, but they are great at pricing them and structuring the rent so that it just does not add up in my calculations, especially as you have no say really while the properties are leased, and neg- meanwhile.
That said, when they had units in Darwin with free stamp duty a year or two ago, might have been a good buy as far as long term growth!YUP, Darwin would have been a good buy a few years ago to hop on the growth there. Me, I did my homework, bought the block of land next to me, put a house similiar to what DHA were building on it, made 150,000 growth and i'm getting at least 50 bucks a week more rent than the DHA ones are returning, and I pay normal agents fees on it not the inflated ones. Yes property will usually rent well near a military establishment, but the money is in doing it yourself not letting DHA doing it IMHO. And.. i've not had more than a week vacant in it in about 3 yrs… had only a couple of tenants in that time and a few days vacant, my agent wishes she had 5 of these to rent. And if I decide to sell, its in my hands, not restricted to an investor on a 10 year lease.
In my opinion, DHA properties are a relatively good, safe investment. If you want a hands off property with minimal worries then DHA is not bad.
BUT if you are prepared to be a bit more aggressive, then In my opinion, there are far better ways to make money, such as that suggested by hgwells, buying privately near a military base. There is always a shortage of DHA properties and defence members can then look to private rentals.
The inability to sell the property would concern me greatly.
Cheers
K
I had one DHA investment for 12 year. In recent years, DHA had changed their contract, and as the result of that, the expoure for the owner is very high.
DHA is no longer offering guarantee lease – there is a section in the lease that gives DHA the rights to terminate the lease prior to the expriation date.16.5% management fee is very high, especially if you think about a whole lease term, ie 6 yr or 9 yr or 12 yr – 16.5% on annual rent for 6, 9 or 12 years will get you to repaint your property many times!
Please note that DHA also has the right to change the rent annually – so be careful.
Most of the DHA property in the market has incl. so call DHA lease benefit in its sales price – it is unlikely you will find a good value purchase.
Average return is 3-4% on DHA property – not really attractive.
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