Buying

Investing on your own or purchasing an investment property with DHA

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The financial outlook in Australia has switched ‘from bleak to recessionary’ in 2015, according to UBS Economist, George Tharenou.

The Australian Bureau of Statistics April-May 2015 survey backs up this sentiment by revealing that mining firms expect to cut investment by about 34 per cent, manufacturing firms by 24 per cent, and other firms by 6.1 per cent. Actual capital spending fell by 4.4 per cent in the first quarter of 2015.

The slowdown in economic activity has meant that the Reserve Bank of Australia slashed the cash rate in May 2015 to a new low of 2.0 per cent and held it at that rate in June 2015. There are also predictions of rate cuts in the near future. Glenn Stevens, Governor of Monetary Policy Decision at the Reserve Bank of Australia, said: “The economy is likely to be operating with a degree of spare capacity for some time yet.”

This might seem like welcome news to property investors, but it is a worrying sign that the economy is becoming weaker. Despite property prices continuing to rise strongly in Sydney and Melbourne, trends have been more varied in a number of other Australian cities.

Sam Saggers, CEO of Positive Real Estate Group, said: “Property investors need to have fiscal consideration and use planning and forecasting to anticipate the challenges ahead and plan how to endure a downturn.”

As a property investor, your ability to ride such a downturn depends on how you manage the risk. You could hold your nerve and do as America’s most successful investor Warren Buffet does and invest counter-cyclically. If you choose to do this – purchase property in an economic downturn – you will need to decide if you go it alone, or tap into the property investment offerings of a reputable company like Defence Housing Australia (DHA).

Their property investment program offers fiscal peace of mind during an economic downturn. Investing with them will give you:

  • a guaranteed rental income[i]
  • a long-term lease of up to 12 years
  • an annual independent licensed market rent review
  • a professional team of property managers who ensure the investment property is repaired and maintained throughout its lease, and
  • a restored property that’s ready to be privately leased or lived in at the conclusion of the lease.

What’s reassuring about this investment is the guaranteed rent for the duration of the lease. The rent is reviewed each year and won’t fall below the starting rent, and is accrued daily and paid monthly in advance.

DHA will manage the tenancy of the property, carrying out inspections and reports at periodic intervals and issuing you a monthly statement that itemises rental payments, outgoings and any other expenses. DHA can also pay any property-related outgoings on your behalf (including rates and insurance premiums) as part of their complimentary bill-paying service.

And because DHA is backed by the Australian Government, and their tenants are members of the Australian Defence Force, it offers you peace of mind that your property is in good hands.

As Lindy Lear, a successful property investor, said: “Investing in areas where there is a military presence helps in finding good tenants – they always pay and are extremely neat and tidy!” 

DHA’s Property Care service means that your investment property will be maintained to a high standard, in line with their contractual obligations with the Department of Defence. And because of this, you’ll have minimal out-of-pocket expenses and phone calls about property management, repairs and maintenance.

 

Property investors have much to consider during a property downturn, including whether to invest and who to invest with. DHA ensures that an investment property’s cash-flow will continue, despite a predicted bleak economic outlook, all the while maintaining it to a high standard.

Enquire online to find out more about investing with DHA.



Disclaimers:
1. Rent may be subject to abatement in limited circumstances.

Investment is subject to DHA’s lease terms and conditions. Investors retain some responsibilities and risks, including property market fluctuations. The advice contained in this article is for general information only and prospective investors should seek independent advice.

 

 

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About the Blogger

DHA

Defence Housing Australia (DHA) provides quality housing and related services to Defence members and their families. To meet their Defence housing obligations, they are active in Australian residential housing markets, acquiring and developing land, and constructing and purchasing houses.

Each year, DHA sells a portion of its portfolio through a property investment and leaseback program. Revenue generated from this activity is DHA’s primary source of capital. It funds DHA’s operations and enables the continual provision of quality housing to Defence members and their families. In turn, investors benefit from DHA’s property expertise and the security of a DHA lease agreement.

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  ["title"]=>
  string(51) "Boost for investors as app sets up off-site bidding"
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  ["introtext"]=>
  string(144) "

Property investors are now able to identify and bid on auctions remotely using a new live-streaming functionality launched by Gavl.

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Called “Request an Auction”, the new functionality enables users to watch and bid on any Sydney or Melbourne auction remotely.

Through Gavl, prospective buyers are now able to register to bid on their preferred auction. The platform will obtain permission from the listing agent and confirm within 48 hours.

Vendors can also request to have their auctions broadcast to a larger buyer audience.

Co-founder Joel Smith said that auctions streamed on Gavl attract 47 per cent more viewers than traditional ones.

He said that Request an Auction will be valuable for remote buyers.

“Buyers are able to have Gavl attend any auction they nominate, so they will never have to miss out on an opportunity due to logistical complications in physically attending the auction.

“Vendors, too, have the opportunity to directly book an auction with us, so they can open up their event to buyers all around the world. With more potential buyers, they’re giving their property the chance to receive more bids and maximise their sales result.”

Mr Smith said that prior to the Request an Auction app, buyers were limited to what they could achieve through the Gavl technology.

Gavl is a live-streaming and bidding platform for real estate auctions.

Mr Smith said that it has streamed more than 6,000 auctions, which have achieved 3.5 million views from 50 countries.

Gavl’s Request an Auction function is currently being offered in Melbourne and Sydney only.

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Boost for investors as app sets up off-site bidding
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Having to split her time between Hong Kong and her original base of Sydney has not slowed Julia Tita’s goal of building a high-performance Australian property portfolio. Instead the resulting alterations to her strategy have positively impacted her investing success.

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Having recently purchased her 6th property, Julia joins host Tim Neary to discuss her journey, share her ups and downs over the years, and reveal her thoughts on why some properties are better than others.

Julia also explains why she no longer makes a move without the help of a buyer’s agent, why working with a strong team of specialists is extremely important and discloses her long-term property ambitions.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

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AREAS MENTIONED:

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Bondi

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How a move to Hong Kong impacted Julia’s Australian property goals
object(stdClass)#1189 (52) {
  ["id"]=>
  string(5) "18159"
  ["title"]=>
  string(88) "‘Common’ referrer practice of being paid on both sides of the fence coming to an end"
  ["alias"]=>
  string(82) "common-referrer-practice-of-being-paid-on-both-sides-of-the-fence-coming-to-an-end"
  ["introtext"]=>
  string(246) "

The practice of property investment firms sharing undisclosed kickbacks among the supply chain involved in development sales will be outlawed in NSW on 1 July this year under the Real Estate Reform being handed down by regulators in NSW.

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Property commentator and valuer, Suburbanite’s Anna Porter, said the reform will address conflicts of interest.

She said they arise when a mortgage broker, accountant or financial planner receives part of the commission from the property firm, who receive their fees from the developer or seller.

“This puts the broker into a position by which they are being paid on both sides of the fence,” she said.

“Until now this has been a grey area and there was nothing stopping this practice.” 

Ms Porter said this has been a common practice in the industry.

"Some well-known mortgage broking firms openly admit to receiving $5,000–$10,000 per referral in their pocket.”

She also said this process has been going on for decades.

"Property investment firms commonly pass some of their commission on to the mortgage broker, accountant or financial planner as a reward to them for passing on the referral. This means that many brokers or financial service providers are making significant amounts of money just to refer on to a property firm, often totalling hundreds of thousands of dollars a year," Anna Porter said.

Ms Porter said the Property, Stock and Business Agents Amendment (Property Industry Reform) Bill 2017 will be in force from July this year, and will prohibit this practice unless the broker or referring partner also holds a real estate industry license.

"Under the new laws, if the broker takes a referral fee from the property firm, they will have to be a licensed real estate agent and also hold a corporation’s license,” she said. 

“Subsequently, every transaction that they receive a referral fee from, they will be putting their license up against the transaction and taking full liability for the conduct, practices and outcome of that transaction, even if they have little to do with the transaction; they are a party to it financially and therefore take as much risk as everyone else in the transaction.”

Mr Porter said where a referrer holds a real estate license, and receives a part of the sale commission, they may find themselves in breach of the ethical requirements under the act.

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‘Common’ referrer practice of being paid on both sides of the fence coming to an end

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