This is the third and final article in the series. Read the first and second article.

It's getting hard to earn a good rate on your money these days, with interest rates on hold and futures markets expecting them to stay at this level for the rest of the year.

This low-interest rate environment is driving rising numbers of private investors to put some of their money into housing for Australian Defence Force members, taking advantage of guaranteed rental income and favourable gross yields.

With long-term leases and gross yields typically more than 4 per cent, these investments are looking increasingly appealing to investors, says Andrew Wilson, senior economist for the Fairfax-owned Domain Group.

"Looking at underlying yields in the economy, they are very low at the moment with bank deposits now around 2 per cent for term deposits," Wilson says.

"The difference between the gross yield for a typical residential investment property and the rate of return on a bank deposit or longer term deposit is at its widest margin in decades, and that's providing extra demand for residential investment."

Changing fundamentals

Providing housing for Australian Defence Force members and their families is a massive operation, with government enterprise Defence Housing Australia reporting a development pipeline of about $2.5 billion in its 2015-16 annual report.

Some property commentators have criticised DHA properties as displaying lower capital growth than more centrally located homes, because they are built in areas convenient to ADF members rather than the general population and they tend to build many similar properties in the same area..

But Wilson believes the fundamentals of good property investment are changing, with capital growth taking a back seat to steady yields.

"In my mind, successful property investment is about a longer term journey," he says. "I think residential investment is more and more moving towards a yield-based return rather than being so concerned with capital growth."

Wilson says the advantage of DHA properties is they come with a long-term lease, typically nine to 12 years, and this means there is plenty of time for the property's yield to consolidate.

That could make them a solid investment in the years to come.

"With a low-growth economy and interest rates set to stay low for some time, I believe there isn't much up or down energy to create such large differentials in price outcomes [as have been seen in the past]," he says.

Equity matters

That's not to say capital growth isn't important. There are some nice tax perks that come with profits from capital gains. And nobody wants to end up with a property that is worth less than they paid for it.

Fortunately, DHA properties are spread around the country, in areas ranging from inner-city Sydney to regional towns like Rockingham and Townsville. Properties based in different areas will suit the needs of different investors.

For example, the DHA website currently lists properties for sale in the Sydney suburbs of Botany and Rosebery, at prices ranging from $785,000 to just shy of $1 million.

They're well located and well placed for good capital growth, with figures from Australian Property Monitors showing the median price of apartments in Botany has increased 54.8 per cent over the past five years.

A rising median price doesn't mean every house has risen by that amount, but it does point to a general rise in the value of homes across the locality.

For investors who don't want to pay as much, there are homes in Wellard, Rockingham, for $445,000 with yields of 4.5 per cent - higher than the apartments in Botany. The median price of houses in Wellard has currently climbed by a more modest 2.2 per cent.

Research still important

DHA also has homes for sale in Townsville where the story is rather different. The town's property market has fallen on hard times since the slowdown of the resources boom, and the median house price has fallen 18 per cent.

DHA investors in Townsville will have been hit less hard than regular housing investors. Their properties will continue to receive rent due to DHA's rental guarantee, and if they have a DHA lease with a rental floor, rent will not fall below the level it started at the beginning of the lease.

Time will tell whether the DHA lease will protect investors long enough for property values to recover in Townsville. The performance of property in this town shows that housing investors need to carefully research the area where they are buying - regardless of whether or not the property is leased to DHA.

Investing in a DHA home isn't for everyone, with some investors baulking at DHA's management fees or believing DHA properties are priced higher than others in the area.

But DHA has an enormous number of satisfied investors. At June 30, 2016, DHA managed 18,767 properties Australia-wide worth $10.6 billion. Of these, 13,169 were managed on behalf of private investors.

Its most recent annual survey found 79.4 per cent of respondents would recommend investing with DHA to others within the next 12 months.