While the price surge in quality Melbourne and Sydney property markets shows little signs of slowing down, this rapid increase in price has lengthened the gap in already poor rental yields. Low rental yields can make property investment less affordable as well as less practical, but all is not lost as there are ways you can either increase the yield of an existing property, or acquire higher yielding properties that still provide strong capital growth.
Property investors focusing purely on capital growth need to be careful as rental yields in Sydney and Melbourne hit record lows.
Research company CoreLogic statistics illustrate that the “gross” rental yield (which is the yield before costs) have reached record lows across Sydney and Melbourne. These plummeting yields have Sydney and Melbourne property investors asking themselves how to remedy this situation to potentially increase the yield on an existing property, as well as consider interstate cities in search of higher returns, CoreLogic says.
Strategies to increase the yield of an existing property could mean a cosmetic renovation of a house or unit, or the addition of a granny flat to further increase the yield being attained. Both Sydney and Melbourne are full of properties that would benefit from an upgrade, creating instant equity as well as the opportunity to raise rents. In addition, specifically targeting properties that provide both strong yield and capital growth may be an appropriate path from the outset.
These strategies can provide anything from a slight increase, to as much as the doubling of the yield you are currently receiving. Turning a 2 percent yield into a 5 or 6 percent yield can make an enormous difference to your investing experience, which should never be underestimated.
No matter what you choose, be sure to enlist the advice and help of a property investment professional for guidance to get the very most out of your investing dollar. We are always proud of our popular live and complimentary educational events that we hold for clients, as well as a team of experienced professionals who are available to assist our clients in every way.
One of these complimentary live events will specifically focus on how to locate high yielding properties with a strong history of capital growth that potentially pay you money each week to own them. Our last event sold out so with limited seats available please don’t delay and register using the link below now.