How to Invest in DHA Properties?
Investing in DHA (Defence Housing Australia) properties is once again gaining a lot of attention, thanks to the secure yields on offer in the current environment.
Many investors who are new to the idea of investing in a property that is leased to DHA, might think that the only way to get involved is to buy directly off DHA. However, there are a number of different ways you can access the safety and security of a DHA lease. There are even ways you can offer your current property to DHA for lease.
Purchasing a DHA Property Directly
For many investors, purchasing a property directly from DHA is the first way most consider getting involved in this type of investment.
When you purchase a property through DHA directly, you stand to benefit from the full length of the lease term which is generally 9-12 years and with many of the houses being newer they offer good tax depreciation benefits.
Purchasing a DHA property generally takes place via a ballot system. While not common, this type of system is used to make sure that those interested in a property are treated fairly. New buyers are required to be pre-approved to purchase a property and then enter into a ballot for that property.
Buying a Mid-Lease DHA Property
At Hudson Property Agents, we specialise in offering mid-lease DHA properties. What this means is that the current owner is looking to sell the property while the current lease with DHA is still running.
Generally, that means the lease term will be a little shorter, but you have the advantage of buying it through a private process, with a privately run agency like ourselves that has been appointed to DHA's Mid Lease Sales Agents panel.
Once again the market ultimately sets the price based on supply and demand, and you as the buyer will have more control over the negotiation process compared to being put into a ballot system. This gives the buyer some control over the price and terms of their offer which is a big advantage for many buyers and the process can feel more transparent.
When purchasing a mid-lease property, you are essentially just weighing up the property as you would do with any other investment. You are simply buying with a fixed lease term in place, that has all the added benefits that come with a lease to DHA. Such as guaranteed rent for the life of the lease and a range of property-related services including most non-structural repairs and a lease end make good.
Lease Your Property to DHA
If you own an investment property, you have the opportunity to lease it to DHA. This is a great way to obtain a long lease term, which is generally three or six years, with all the normal benefits that are associated with a DHA leased property.
You will need to consider if your property is suitable for use by DHA, however it is a great way to get a lease in place that will be paid from the moment the lease is signed.
Buy an ex-Defence Property
Not all properties that are used by Defence Force Families are owned by private investors. A large number are owned by the Department of Defence. These properties are generally sold without the lease in place, but they are generally properties that have been maintained to a high standard.
It’s important to understand the difference between a mid-lease property and an ex-Defence property because they are slightly different.
Generally speaking, purchasing properties with a long-DHA lease in place is a great way to generate steady and secure rental income and it’s important for investors to know how to gain access to these types of investment opportunities.
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