This is a continuation of my previous article, “DHA Rent Review – Not Even Close.”
The annual Defense Housing Authority (DHA) rent review process is finally over. And, here are the results.
The property in Adelaide came in at $385 per week; a full $20 more than the original DHA valuation.
The property in Brisbane came in at $470 per week; a whopping $45 per week more than the original valuation!
These numbers seem pretty reasonable. In other words, the DHA is getting a good deal at these rents. Not too high, not too low – just right. A “Goldilocks” deal.
How do I know?
First, I checked realestate.com.au and looked at market rents for similar properties in the area. I would say most properties were priced the same or higher than the final rental numbers we achieved. I’d be quite happy to pay the agreed upon rents for our DHA properties. They’re right “in the pocket.” Not overpriced, not underpriced for the market. One word comes to mind … fair. They are priced fairly.
Next, I hired a secondary valuation team to determine market rent. Yes, it’s a challenge to the DHA valuation team. But the secondary review is part of the DHA rental program. If you disagree with the DHA valuation, you can hire a second one. Then your team and the DHA team will come to an agreement about the final rent.
For the property in Adelaide, my valuers came back with $385 per week. DHA number was $365. The final agreed upon rent is $385, which shows the DHA agrees with the secondary valuation. They have no problem paying the extra $20.
But, I can’t help but wonder why the DHA didn’t come up with this number to begin with? The rent last year was $375 per week, so their valuation was saying that rents have dropped. I did a quick check on realestate.com.au and could tell very easily that they hadn’t; rents were higher for similar properties.
But, it was the house in Brisbane, that really brought about my consternation. The DHA valuation came back saying the rent should stay the same; $425 per week. Again, I did a quick check on realestate.com.au and could plainly see this was incorrect by a long shot. Most 4 bedroom homes in the same area, of the same quality, with the same features, were renting near the $500 per week mark.
My secondary valuation for this home came back at $485 per week. After a series of back and forth between valuers, the final number came in at $470; a full $45 per week over the DHA original valuation! How could they get it so wrong?
This process has left me wanting. Why couldn’t the DHA come up with a reasonable valuation to begin with? Why did I have to challenge their numbers? Why did my challenge uncover a big discrepancy?
Do you have a DHA rental? How did your rent valuations go this year?