Investing in the property is an inherently risky exercise. The market is changing, tenants can be hard to find and the right location is absolutely crucial to guarantee returns. So, whether you're a seasoned experienced investor or you just want to take your first steps in the market, it's a good idea to minimize the risks as much as possible.
But what is the best approach to adopt? It varies from one investor to the other; some like the investment aspects of research and fact-finding as well as potential returns. However, there are also simpler paths. Defense real estate is becoming an increasingly popular choice for investors – with locations close to amenities, reliable tenants and ongoing support, this is a less risky option that allows investors to explore opportunities they might never have considered.
Defense Housing Australia
Currently, Defense Housing Australia (DHA) is one of the largest real estate managers in Australia. With nearly 18,000 properties in Australia, the organization oversees a portfolio valued at approximately $ 11 billion.
Each year, DHA sells a portion of its portfolio to investors who then rent it for the long term. These properties are then used to house Defense members and their families across the country.
Suzanne Pitson, Executive Director of DHA's Portfolio Management Group, says this arrangement is designed to be mutually beneficial to both the homeowner and the tenant.
"The revenue we generate from this activity is our primary source of capital," says Pitson. "It finances our operations and allows us to provide quality housing to Defense personnel. From an investor's point of view, this solves the common problem of finding a tenant to live in your investment property. "
There are also other benefits, says Pitson. All day-to-day management of your investment is also supported, including coordination and payment for most non-structural repairs and maintenance. In addition, leases are long-term and, in most cases, rent is guaranteed, even if the property is not occupied. The rent is also paid in advance on the first day of each month.
The investor retains a number of responsibilities and will have to pay various expenses, but this is an ideal situation for those who are looking to use their investment properties more easily.
"A real estate investment in DHA is suitable for those seeking a long-term, maintenance-free conservation strategy and tenant problems," says Pitson. "Our long-term leases are generally nine or 12 years old and an income stream from our reliable rent provides a sense of certainty that other real estate investment opportunities do not offer."
Who can invest?
The misconception that one must be a member of the defense to buy a DHA investment property is a misconception. But that's not the case, says Pitson.
"Although many Defense members have invested in DHA, the majority of our investors have no connection with the Defense. Our investors come from various backgrounds and stages of life. However, they all have one thing in common: they want to generate wealth and secure their financial future. "
Pitson cites the example of Katalin, a computer scientist based in Sydney.
"When Katalin arrived for the first time, she had already bought a private investment property," says Pitson. "This gave some results, but there were also a number of mistakes that she wanted to avoid in the future."
After discovering how the process worked, Katalin chose to go through the DHA for future investments. Several years later, she now owns three investment properties through DHA and was impressed by the results. They have all seen growth in rents and property values, while their participation in daily monitoring remains minimal.
"It was the best investment decision of my life because it eliminated stress from the whole process," says Katalin.
Where can you invest?
DHA properties are located in most capitals and major regional centers of Australia, primarily where the Defense Force is present. Properties available for sale are also integrated into communities, rather than being located on Defense bases, explains Pitson. As a result, they have the advantage of being located near schools, shops, transport and other amenities.
"We currently have great investment opportunities in exceptional areas that contradict the trends in Sydney and Melbourne," says Pitson. "Some of the most notable sites are Canberra, southeastern Queensland, Hunter and Darwin."
What happens after the end of the lease?
At the end of the lease, the property is returned to the investor. They may also be entitled to a repair at the end of the lease.
"That means you can move in, rent privately or sell as you please," says Pitson. "It basically means that the DHA will ensure the proper operation of all appliances and the professional cleaning of the property. Housing, grounds and landscaping will also be refurbished if necessary. "
To account for the wear and tear, if the lease term is six years or more, DHA will paint the property on the inside. If the term of the lease is nine years or more, DHA will also collect and paint the external structure, unless it is the responsibility of a corporation.
Want to know more?
Properties are available for sale on alternate Tuesdays and can be viewed on the DHA website for nine days before being sold through a voting process.
The first step is to register your interest on dha.gov.au.
A sales consultant will be assigned to the procedure of purchase and explanation of the lease.
Once registered, you will also receive a bi-weekly email from DHA so you can be one of the first to know about the opportunities available to him.
With interest rates at their lowest for over 50 years, there are excellent rates available. The best thing to do is to compare the rates of all the lenders. Let us help you solve this problem – Compare home loans now
