Join Australia's most dynamic and respected property investment community

Defence housing

Discussion in 'Where to Buy' started by samiam, 16th Oct, 2015.

  1. samiam

    samiam Well-Known Member

    Joined:
    5th Sep, 2015
    Posts:
    522
    Location:
    on my way
    Any one would like to share the experience? either bought the currently leased property or similar..
     
  2. D.T.

    D.T. Adelaide Property Manager Business Member

    Joined:
    13th Jun, 2015
    Posts:
    5,569
    Location:
    Adelaide, SA
    I looked into it when i first began investing.

    It's good in that they look after it, lease it very long term and they restore it to new again at their completion.

    The downside is that
    - The properties are usually over priced compared with equivalent normal properties in the same area
    - You have to use their inhouse PM who is expensive
    - There's no scope to add value

    If your investing strategy is set and forget, "i never want to hear about this again" thats fine. You sacrifice a little bit of return in return for a hands off experience.
     
  3. samiam

    samiam Well-Known Member

    Joined:
    5th Sep, 2015
    Posts:
    522
    Location:
    on my way
    thanks @D.T. I thought the same but I guess I am looking for an easy way :D.
    Anybody had an experience of renting them an already developed property?…I know they have defence housing properties around the area I am looking at… not-so-demanding areas though
     
    Last edited: 16th Oct, 2015
  4. wombat777

    wombat777 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    1,412
    Location:
    33°41'24.7"S 150°55'34.3"E
    Also looked into it in the Ipswich area, around March this year. This was a property 7 years into a 13 year lease. Condition was good and depreciation would have been respectable.

    Tried to low-ball the vendor who just wouldn't budge. Price I was willing to pay was below their original purchase price. They had tried and failed a number of times to sell.

    Decided that property was not ideally located to warrant pursuing further. It was in an isolated part of the suburb so location to amenities such as shops and schools was poor.

    I ended up buying a recently-renovated 50 year old property that is cashflow positive and in a good location for gentrification and capital growth.
     
    samiam likes this.
  5. Chilliblue

    Chilliblue Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,578
    Location:
    Australia
    You will limit the market if you have to sell the property.
     
    samiam likes this.
  6. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,544
    Location:
    Sydney or NSW or Australia
    I do know someone who bought and held. Sold post DHA vacating & make good.

    They had purchased in Darwin when prices were reasonable (even for these).

    Sold with a decent capital gain however you do need to pick the right market.
     
    samiam likes this.
  7. superace

    superace Member

    Joined:
    21st Aug, 2015
    Posts:
    24
    Location:
    Brisbane
    ive heard financing could be trickier with certain banks too. If a bank ever had to resell it and recoup losses, they can only sell it to a certain market compared to a normal home.
     
  8. No Probs

    No Probs Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    117
    Location:
    Perth
    samiam likes this.
  9. wombat777

    wombat777 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    1,412
    Location:
    33°41'24.7"S 150°55'34.3"E
    That was the case when I was seeking finance to buy the DHA property in around March this year. CBA would only do 90% LVR or lower at the time. I believe at that stage they were willing to do 95% lends for regular investment properties.
     
    samiam likes this.
  10. samiam

    samiam Well-Known Member

    Joined:
    5th Sep, 2015
    Posts:
    522
    Location:
    on my way
    I see. Thanks. I am looking at building at own place (outskirt, regional) and rent it out to DHA - its a backup plan if it does not rent out well, but I guess I got to follow the set requirements.. haven't really decided yet...
     
    Last edited: 18th Oct, 2015
  11. Chilliblue

    Chilliblue Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,578
    Location:
    Australia
    If you have a new property in an area that DHA are interested in, you can contact them as an individual and offer your property to them. Cheaper than buying one.
     
    Last edited: 19th Oct, 2015
    samiam likes this.
  12. aussieB

    aussieB Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    71
    Location:
    Darwin
    I was interested in a few properties they were selling in Darwin. Rough calculations showed the rent they pay and the commission they charge usually leaves a property at just about neutral, if not negative with today's interest rates.Not something for me atm, but good luck
     
    samiam likes this.