Defence Housing

[WebBoard]

From: Mike .


Defence Housing Investments
From: Thorpedo
Date: 21 Feb 2001
Time: 13:50:44

G'day folks !

Any thoughts -ve or +ve on owning Defence Housing IP's would be appreciated. They apparently charge 12% management fees which include maintenance. Also repaint internally after 6yrs lease & externally & new carpets after 9yrs lease. Sounds pretty good. They even protect you from any tenant damage etc. You only have to provide your own property insurance & I presume pay rates. Sounds really good.

There are properties for sale in Townsville for $215000 renting for 290/week. And you are paid rent the whole term of the lease (6 or 9 yrs)! That's bloody good !!!!

What are your thoughts please ? Have a great day!

Thorpedo.

 

[WebBoard]

Geoff W

Reply: 1
From: Mike .


Re: Defence Housing Investments
From: Geoff W
Date: 21 Feb 2001
Time: 22:15:44

Thorpedo,

I've had one for about 3 years.

Pluses:
No management hassles
Rent reviews annually
Establishes a rating with the bank (a benefit I hadn't realised).
No (or little) unexpected maintenance expenses.
Able to sleep at night.


Minuses:
High management fees.
Higher purchase price (so capital growth suffers).
Low return.


Road test results:
Recommended for first time investors. Gives comfort and reliability. Helps build up confidence and a credit rating for the next IP.

Not recommended for experienced Somers forum graduates. But, hey, you've got to start somewhere.

Geoff W

 

[WebBoard]

Pierre

Reply: 1.1
From: Mike .


Re: Defence Housing Investments
From: Pierre
Date: 21 Feb 2001
Time: 20:29:01

One option to avoid paying the premium for a DHA property is to:

* approach DHA in your area


* ask them if they need stock and what their criteria for properties are (this is important - you must have LUG, BIRs certain number of rooms etc etc)


* if they are after stock, strike an agreement to provide them with a house they will lease back under their terms and conditions


* buy or build the house yourself.


If you don't pay too much for an established house that fits the bill, this method ensures you don't pay the premium.

Pierre (ADF member)

 

[WebBoard]

Alex

Reply: 1.1.1
From: Mike .


Re: Defence Housing Investments
From: Alex
Date: 21 Feb 2001
Time: 14:15:05

My only comment is that you will pay about $20,000 more for the same house on the same street.

Check out the prices in the area with some agents and compare them to the DHA houses.

Alex

 

[WebBoard]

Jeremy

Reply: 1.1.1.1
From: Mike .


Re: Defence Housing Investments
From: Jeremy
Date: 21 Feb 2001
Time: 20:27:25

Totally agree with Alex. Aside from the fact that the 10year (or whatever contract) doesn't give you enough rent increase, in the short term I'll sell you any of my properties with a 50% return and 100k+ above market rates. Call me please! Operators are standing by now to take your call!