Sell with Confidence
Read More
News

Top Rental Yields

By Rebecca Richmond

With housing finance more available it’s no great surprise that new Australian Bureau of Statistics housing finance data shows increased investor activity in the Australian property market.  It’s a good time to buy an investment property, but it is important to be sure it will pay its way.

A good starting point is to consider the rental yield – that is, a property’s annual rental as a percentage of the purchase price.  So, for example, a property costing $300,000 and renting for $9,000 a year would have a gross rental yield of 3 per cent.  Generally, the higher the rental yield the better the property’s return.

While the right house in the right suburb can bring a good rental yield, REIV sales and rental data over the 12 months ending September 2013 show that the highest rental yields are usually for one bedroom or two bedroom apartments.  In fact, the top three investment options in Melbourne are all for one bedroom apartments.

The average rental yield for a one bedroom apartment in Melbourne is 5 per cent.  For a two bedroom apartment it is 4.4 per cent.  But buying a carefully selected apartment in an in-demand suburb can mean a yield far exceeding the average.

Melbourne’s top investment option is a one bedroom apartment in the popular inner city university suburb of Carlton, with its current return an average gross rental yield of 8.3 per cent. But it is not always the inner-city which brings the highest returns – illustrating a the importance of research.

The REIV data shows Melbourne’s second best investment option  for the 12 months is affordable outer suburban Noble Park at 7 per cent, where the median price of a one bedroom apartment is just $155,000. So, three could be bought for the price of just one in Melbourne city, where the median was $481,500, offering the third-highest yield at  6.5 per cent.

Source: www.reiv.com.au

Up to Date

Latest News

  • The top colour trends for 2021 are surprisingly serene

    With the pandemic swiftly changing our relationship with the four walls in which we reside and many of us now working from home, the lines between our work lives and our home lives have been substantially blurred. While your budget might not stretch to a full-blown renovation involving an extension … Read more

    Read Full Post

  • Strong auction clearance rates dominate October

    October is already on track to be a record month for Australasia’s leading real estate group with clearance rates at an all time yearly high across the country. Buyer demand continues to stay high as many compete to close the deal in time for Christmas. Last weekend, the Ray White … Read more

    Read Full Post