Why invest in Defence Housing?

Why invest in Defence Housing?

Why invest in Defence Housing?

Benefits of investing in Defence Housing

    • Guaranteed rental income
    • Receive current market value rent for your property assessed annually by independent valuers
    • Long-term leases of up to 12 years, with the possibility of extensions
    • Property Care Contract covering costs of general maintenance and non-structural repairs
    • One service fee, charged as a percentage of gross rent.

Rent

Guaranteed rental income

As your lease agreement is with DHA they are responsible for keeping the property occupied throughout the lease term. This means that regardless of whether the property is occupied, you will continue receiving rental payments as long as the property is habitable. 

Unlike leasing through a traditional property manager, you will not be charged re-letting or advertising fees at any time. If the property is vacant, DHA will continue to maintain your property, lawns and gardens as part of the Property Care Contract. 

Rent is accrued daily and is paid monthly in advance for the duration of the lease.

If your property becomes uninhabitable for any reason eg - flood, storm or fire, DHA can negotiate temporary rent abatement with you. This gives you the security of knowing your lease remains in place while you/your insurance company undertake the repairs to your property.

 

Annual rental reviews

Rental valuations are based on the current market rent of similar properties in their location. 

At periodic intervals outlined in your lease, typically annually, DHA will engage an independent licensed valuer to provide a professional valuation for the rent, based on current market values. This review will determine the rent for the following year of your lease.

If you are unhappy with a rental review, you may invoke a secondary review by engaging an independent licensed valuer yourself, to conduct a valuation on your property. This additional valuation will be at your cost and not covered under the DHA Lease/Property Care Contract. 

 

Lease

Long Term Leases

DHA generally offer leases for 3, 6, 9, or 12 years at the commencement of the lease.  However, so that they have the flexibility to meet obligations for the Defence members, additional terms are included in the standard lease agreement. 

At DHA’s discretion only, DHA can vary the lease by exercising each of the following rights once:

    • extend the term by up to 36 months
    • extend the term by up to 12 months.

You can choose to sell your property at any time during the lease, however, it must be with the DHA lease and Property Care Contract in place. It is vitally important to choose an experienced Agent such as Hudson Property Agents who collectively have decades of knowledge and experience to confidently discuss the benefits of the DHA lease so that you are able to maximise the best possible price on your investment.

End of lease

At the end of your fixed lease term or extensions, you can:

    • choose to sign another lease with DHA if DHA still require your property, or
    • have the property returned so you can move in, rent privately or sell as you wish. 

The DHA Leasing Team will contact you as early as 12-18 months before the end of your lease to work with you to sign a new long-term lease with DHA or prepare to return your property at lease end. 

 

Property Care Contract

DHA are your tenant, property care provider and property manager. They will manage your property under the terms of the Property Care Contract. The lease agreement and the Property Care Contract run concurrently and end simultaneously. The Property Care Contract outlines the services DHA provide throughout the lease term as part of the service fee. 


Services provided under the Property Care Contract include:

    • Vacancy Management
    • Repairs
    • Scheduling of maintenance and routine inspections
    • Rent Reviews (through independent valuers)

You can find a comprehensive description of services provided, exclusions, and definitions in the Property Care Contract. 

Vacancy Management

DHA keep your property occupied and manage the Defence members/occupants throughout the lease term, including:

    • Arranging for occupants to move in and out of the property
    • Managing the occupant 
    • Conducting routine inspections
    • Providing inspection reports at periodic intervals.

If the property is ever unoccupied, DHA will undertake general grounds maintenance, water gardens, prune trees, mow lawns, and collect mail to ensure the property remains in good condition and appears occupied.

 

Repairs

DHA are responsible for organising and covering the cost of most non-structural repairs and the replacement of fixed appliances as needed. 

A comprehensive description of repairs included in our service and exclusions can be found in the Property Care Contract. 

Any work to your property will be undertaken by a DHA-appointed licensed or suitably qualified trades-person.

Where repairs and maintenance fall under your responsibility, DHA will contact you to discuss the work and options available. 

Emergency Repairs

In the event of an emergency—where action is needed to preserve the property and protect human health, safety and security—DHA will act quickly on your behalf. Examples include flooding, fire or a breakdown or failure of any essential service. 

If the emergency arises from an item for which DHA are responsible for the repair, DHA bear the costs. If the emergency falls within your responsibilities as the landlord, DHA will contact you so that you can provide your instructions to repair or notify your insurer of the situation. Any reasonable costs incurred by DHA will be invoiced as an additional payment to the service fees.

Lease end maintenance and handover

   At the end of the lease agreement, DHA ensure your property is returned to you:

      • Cleaned to a professional standard
      • With appliances clean and in working order (except fair wear and tear)
      • The dwelling, grounds and landscaping are in a neat and tidy condition.
      • Repainting and/or recarpeting where eligible (refer to lease agreement)

 

Scheduling of maintenance & inspections

DHA will carry out inspections of your property at periodic intervals and provide you with an inspection report.

Should you, your contractors or insurer require access to the property, DHA will arrange appropriate times for these inspections.

Rent Review

At periodic intervals outlined in your lease, typically annually, DHA will engage an independent licensed valuer to provide a recommendation for the rent based on current market values. 

 

Property Care Service Fee

All the benefits of the Property Care Contract are provided under one simple service fee.

This service fee is calculated as a percentage of the gross rent and is deducted from your monthly payments. Depending on the property type, we charge:

    • a flat fee of 16.5% (inc GST) for most free-standing houses
    • a flat fee of 13.0% (inc GST) for properties where a body corporate is responsible for most of the common areas, including external paint.

What’s included under the service fee

With DHA’s service fee, you’ll receive more benefits than you would through a traditional property management fee.

DHA’s service fee includes the cost of:

    • all vacancy management - saving you on re-letting and advertising fees and any loss of rent while your property is vacant. As part of our rental guarantee*, if the property is ever unoccupied, we still pay you rent and manage the grounds to ensure they are neat and tidy.
    • most non-structural repairs including the replacement of fixed appliances as needed. We also organise tradespeople to complete most repairs and will act quickly on your behalf if an emergency repair is required.
    • Other benefits from the Property Care Contract include periodic rental reviews, scheduling and facilitating inspections and contractors, and lease end repair and cleaning.

Costs not included in the service fee

As a landlord, you will retain responsibility for some outgoing costs, including:

    • Council Rates
    • Water Rates (Usage reimbursed by DHA)
    • Strata Rates (If applicable)
    • Land Tax (if applicable)
    • Insurance 
    • Termite Inspections 
    • Repairs and maintenance not covered under the service fee (please refer to the DHA lease agreement and property care contract)
    • As with any property investment, it is your responsibility as an investor to determine the scope of these fees and your responsibilities with other government agencies.

Comparing DHA’s service fee to a traditional property management fee

The inclusions and benefits provided under DHA’s service fee and Property Care Contract may provide savings over the total cost of leasing through a traditional real estate agent management agreement.

According to a study conducted by BIS Oxford Economics, after considering all the comparable costs of managing an investment property to the same standard, in most scenarios, investors leasing a property to DHA will save money compared to those leasing through a property manager.  Download the Property Management Fee Comparison report to read the full comparison, including data related to the typical costs expected for your investment property.

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