It appears to me, the 2 biggest problems with investment properties are 1. unscrupulous tenants and 2. empty houses. So, is defence housing the way to go? I've breifly looked into it, and it looks great to me. What are the drawbacks?
Unreal wrote:It appears to me, the 2 biggest problems with investment properties are 1. unscrupulous tenants and 2. empty houses. So, is defence housing the way to go? I've breifly looked into it, and it looks great to me. What are the drawbacks?The point of investing is to also make a profit. Generally speaking DHA homes are in average areas and they ask for significantly more in management fees. If you are a set and forget type of property investor then yes they have there merits and with time the property will grow in value. But the property market is still a bit unstable in many areas so buying well or improving via renovation etc is what more people are leaning towards. I live in nowra . We have a naval base and therefore we have a lot of defence homes. The vast majority of these are found in a new estate to the west of town. Its our version of a mc mansion city. I would not buy there period let alone a DHA house. That being said there is the odd DHA home that pops up in really good suburbs. These i would consider. Basically look at the quality of the property as a stand alone investment befor you consider the pros or cons of DHA. Hope that helps
So, for a negatively geared, long term investment it would be a good thing? Just not a short term, money-maker?
DHA set the rent and as stated their management fees are high and nothing is negotiable. On the up side the property should be well maintained and re-carpeted & painted periodically.
Personally, I like control and want to know if a light bulb breaks ( well almost) .
Get their paper work and run it by your accountant and solicitor.
Good luck with it….It is good if u r a passive investor who doesn't want to be involved in day-to-day management of your IP
Personally, I would like to avoid itIf you are afraid of 1. unscrupulous tenants and 2. empty houses
then
1. get a good property manager… I have one that inspect the house every 3 months taking all pics. Good property manager tends to select appropriate tenants
2. Get landlord insurance
3. Geographic location of the property (i.e. if you buy in conamble, NSW (cheapest property in NSW) then the chance to get trash is huge)
4. Type of property
5. Competitive rent
etc etc etcUnreal wrote:So, for a negatively geared, long term investment it would be a good thing? Just not a short term, money-maker?
Before you buy, consider your exit strategy. That is, do you have to sell thru DHA or can you sell on-market? Will it be harder to sell as it has a long term lease in place? Will it be sold at a more attractive yield (higher yield or return = lower price) due to the longterm tenancy agreement?
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