- alterego44Participant@alterego44Join Date: 2013Post 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?Jamie MooreParticipant@jamie-mJoin Date: 2010Post Count: 5,069fredo_4305Participant@fredo_4305Join Date: 2009Post 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.Tony FlemingParticipant@the-dark-knightJoin Date: 2008Post 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.Jacqui MiddletonParticipant@jacmJoin Date: 2009Post 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.JT7Member@jt7Join Date: 2010Post Count: 286
Here's some information that pretty much covers what others have said.Nigel KibelParticipant@nigel-kibelJoin Date: 2005Post 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