How to buy a DHA Mid-lease property

How to buy a DHA Mid-lease property

One of the great things about buying a DHA property is the long secure lease term that is generally 9-12 years.

For property investors this can offer great security as you know you’re going to be paid regular rental income and there won’t be any additional costs that you need to cover, such as maintenance or even things like vacancies.

However, circumstances changes and sometimes investors look to sell their DHA leased property during the term of the lease.

As an investor, how do you go about buying a DHA leased property?

In many ways, buying a mid-lease property is no different from purchasing a normal house that is being rented out and under contract. Generally speaking, in those circumstances, you would need to wait until the end of the lease period to gain access if you wanted to live in it for example.

A mid-lease DHA property operates in a similar way. When you buy or sell the property, you are required to sell with the remainder of the lease intact.

Mid-lease sales are done through private agents, and the process is similar to purchasing any other home. The only difference is that your tenants will be the families and members of the Australian Defence Force.

DHA leased properties are no different from other properties in a given area or state. As such, the price is set by the market in that area. The real benefit of buying a mid-leas DHA property is the security around the lease and the ‘hand-off’ nature of the investment.

In terms of the buying process, there are still some things you should consider doing.

It’s recommended that you do a building and pest inspection, in the same way, you normally would. That way if any issues arise, that can be taken care of by the current owner. Similarly, it is recommended that you look into obtaining building and landlord insurance.

Organising your finance is again a similar process, where it is recommended that you speak to a mortgage broker. However, not all mortgage brokers understand the way in which DHA leased properties operate and also the way in which lenders will assess your application for finance.

So it is well worth speaking to a mortgage broker who has experience with DHA properties so they can find the right loan product to suit your investment needs and personal circumstance. They will also have a better understanding of which lenders look favourably on DHA properties and that could increase your ability to borrow.

There are no major requirements as to who can buy a DHA leased property. Virtual any Australian resident is able to invest in a DHA leased property and you can do so as an individual, trust or company. Foreign residents are also able to buy a mid-lease property if eligible.

If you choose to sell you DHA leased property down the track, the process is once again quite simple. You just need to inform the DHA of your intentions and you can sell through an agent that is part of the DHA panel. These are generally agents that are experts at all aspects of DHA leased properties and will be able to market your property to achieve the best outcome possible. This also allows you to advertise the property through the DHA portal, which potentially can attract further enquires. However, you can choose to use non-panel agents, but you will need to inform the DHA.

Buying a mid-lease DHA property can be a good way to find a great investment that offers long-term secure income, without the additional headaches associated with other investments, such as maintenance costs and vacancies.

Generally speaking, the process of buying a DHA leased property is very similar to that of a normal property, that is currently under contract. Feel free to contact us, if you have any questions about the buying or selling process.

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