If you were to invest for yield right now where would you look?
2012 yield locations
- Thread starter Jake Milne
- Start date
Melbourne IT (ASX code MLB)
9% yield
Fully Franked
No toilets to unblock, no vacancy, no property management fees.
9% yield
Fully Franked
No toilets to unblock, no vacancy, no property management fees.
I'd second Devank ...you can't go past yields of 7.5% in the Logan area.
Thanks for the share tips chaps...
Logan's an interesting suggestion
High yielding areas are:
NSW - Muswellbrook & Singleton
QLD - Blackwater & Moranbah
VIC - Red Cliffs & Warracknabeal
Please don't take these as suggestions as where to buy as I've only looked at yield; there's a lot more to consider when investing.
I'm not sure on the other states - perhaps someone else could help there?
Logan's an interesting suggestion
High yielding areas are:
NSW - Muswellbrook & Singleton
QLD - Blackwater & Moranbah
VIC - Red Cliffs & Warracknabeal
Please don't take these as suggestions as where to buy as I've only looked at yield; there's a lot more to consider when investing.
I'm not sure on the other states - perhaps someone else could help there?
Vacancy Rates:
NSW
Singleton = 1.7%
Muswellbrook = 2.9%
QLD
Blackwater = 0.2%
Moranbah = 0.7%
VIC
Red Cliffs - 1.4%
Warracknabeal - 0.5%
NSW
Singleton = 1.7%
Muswellbrook = 2.9%
QLD
Blackwater = 0.2%
Moranbah = 0.7%
VIC
Red Cliffs - 1.4%
Warracknabeal - 0.5%
Hmmm, that's interesting... I grabbed the vacancy rate as per postcode 4744 from the Vacancy Table in API.
Where did it say 9.8%?
Would be good if we could cross reference as these stats can vary from different data providers.
Where did it say 9.8%?
Would be good if we could cross reference as these stats can vary from different data providers.
It's been all over multiple property reports for 6 months now. The mining company is refusing to sign more leases as they believe the rental amounts are out of control. As properties are becoming vacant, vacancies are not being filled. The whole thing's a bit of a stalemate at the moment.
Prices have also dropped significantly. Without the mining industry to support it, it's a nothing town. The mine has long term viability, but they're the sole reason for both values and rents. A highly risky area to invest at the moment.
A 10% vacancy rate has the potential to knock the yields around significantly, which is why I think posting yield figures that are calculated solely from median property sale price and median rent are useless at best and misleading at worst.
Many property holding costs are roughly the same (or the differences are reasonably insignificant) like council and water rates and insurances. Expenses or other factors that are likely to significantly effect yields should be considered like vacancy and strata fees (if any).
If we're talking properties in Sydney metro, then vacancy is almost a constant EXCEPT if the property is a managed apartment, where it could have 15% vacancy -- a huge hit on the yield. Similarly, units appear to have fantastic returns until the $4,000 a year strata fees are taken into account.
So if you're looking at yield, always ask about strata fees and vacancy and take these into account at the very minimum.
If a property was also going to be difficult to lend against and will result in needing a larger deposit or higher interest rates (say, regional property or very small units) then these addition costs should also be considered.
The aim is to compare apples to apples.
Many property holding costs are roughly the same (or the differences are reasonably insignificant) like council and water rates and insurances. Expenses or other factors that are likely to significantly effect yields should be considered like vacancy and strata fees (if any).
If we're talking properties in Sydney metro, then vacancy is almost a constant EXCEPT if the property is a managed apartment, where it could have 15% vacancy -- a huge hit on the yield. Similarly, units appear to have fantastic returns until the $4,000 a year strata fees are taken into account.
So if you're looking at yield, always ask about strata fees and vacancy and take these into account at the very minimum.
If a property was also going to be difficult to lend against and will result in needing a larger deposit or higher interest rates (say, regional property or very small units) then these addition costs should also be considered.
The aim is to compare apples to apples.
Jake, your vacancy rates are rather out of date, current Moranbah vacancy rates are 9.8%!!
http://www.sqmresearch.com.au/graphs/graph_vacancy.php?postcode=4744&t=1
Hmm, just discovered someone else has also pointed this out.
Similar threads
