All Topics / General Property / defence housing.. what’s the catch?

Is now a good time to buy real estate?
Viewing 7 posts - 1 through 7 (of 7 total)
  • Profile photo of alterego44alterego44
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    @alterego44
    Join Date: 2013
    Post Count: 16

    Been doing a little research On defence housing and it’s seems like a great deal!

    You buy the house and they can guarantee rent for up to 5 years and pay some maintenance, re-carpet and re-paint the house when the time is up!
    so what’s the catch? Has anyone had experience with defence housing?

    Profile photo of Jamie MooreJamie Moore
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    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    Long leases can be prohibitive for the owner. There's been a few posts on the topic that should reveal some pros/cons.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
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    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of fredo_4305fredo_4305
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    @fredo_4305
    Join Date: 2009
    Post Count: 336

    They have an extremely high management fee around 17% although I think they pay for repairs. However they only touch new houses so how many repairs could there be.

    Maintenance wise the don't fix everything like they should as it is out of their pocket not yours. They try to minimize there costs.

    Rent is never top dollar just the area average.

    Houses are generally in poor growth estate suburbs.

    Hard to sell with a long lease.

    Unable to renovate, repaint if you even if you wanted too.

    Houses must have certain features ie amount of washing line, pergola sqm, etc etc.

    Profile photo of Tony FlemingTony Fleming
    Participant
    @the-dark-knight
    Join Date: 2008
    Post Count: 396

    From what I've heard its good for Mum and Dad/SMSF investors who will worry about not having a tenant and making the repayments, as you said  the rent is all sorted. Depends what sort of portfolio you want and what you want to achieve with it. I don't think they sound that promising. I couldn't imagine much cash flow with management at 17% and as Fredo said they are usually in poor growth suburbs although I'm sure if you researched a bit you could find one in an area with potential.

    Tony Fleming | Triumphant Property Group
    http://www.triumphantpropertygroup.com.au
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    NSW Buyer's Agent specialising in Western Sydney-Blue Mountains-Orange-Albury

    Profile photo of Jacqui MiddletonJacqui Middleton
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    @jacm
    Join Date: 2009
    Post Count: 2,539

    I looked into it a year or so back to determine whether it was a viable strategy or not. I found one DHA property for sale at a price of $50k more than an identical house in the same sort of position in a different street and which was on for sale on the regular private sale market.

    Jacqui Middleton | Middleton Buyers Advocates
    http://www.middletonbuyersadvocates.com.au
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    VIC Buyers' Agents for investors, home buyers & SMSFs.

    Profile photo of JT7JT7
    Member
    @jt7
    Join Date: 2010
    Post Count: 286

    Here's some information that pretty much covers what others have said.

    http://propertyupdate.com.au/the-defence-rests-on-military-housing-investment/

    Profile photo of Nigel KibelNigel Kibel
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    @nigel-kibel
    Join Date: 2005
    Post Count: 1,425

    The biggest problem with defense housing is that they are often based in secondary locations, secondly they are often on 10 year leases with expensive property management and growth in these properties can also be quite low. In you are selective on the areas you are investing in its not that hard to find good tenats

    Nigel Kibel | Property Know How
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