Residential
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St Kilda, Brunswick, and the Melbourne CBD have all been identified as having strong rental yields over the month of February, displaying key areas for investors of residential real estate to begin their property search.
When investing in real estate, high rental yields are one factor that may affect your decision to buy property. This figure is generally used to measure how profitable a rental property may be.
New information from RP Data found Brunswick East and St Kilda East were the two suburbs within 10 kilometres of Melbourne that possessed the highest yield for houses. The information in a March 24 RP Data blog post found the two suburbs had a gross yield of 4 per cent, which is 0.6 per cent higher than what was experienced citywide.
Meanwhile, units that possessed the highest rental yield within 10 kilometres of the city were found to be in Melbourne CBD. Here, gross rental yields were found to be 5.8 per cent for February, suggesting that units and apartments may be a more profitable investment.
Recent data compiled by the Real Estate Institute of Victoria (REIV) found that one-bedroom units in Melbourne are a popular choice amongst buyers and currently have a median price of $305,000. As a result, these types of properties could be a lucrative addition to any investors portfolio in coming months.
House or unit?
Taking the first steps towards investing in a property can be a difficult process. From houses and units to apartments, there are many types of properties that investors can choose from.
Houses generally require more maintenance than an apartment or unit, usually due to the larger lot size or backyard space. However, being in proximity to family-oriented amenities such as shops, hospitals and schools, they can attract more desirable and long-lasting tenants.
On the other hand, units and apartments can be tied to strata fees, which can range from the hundreds to the thousands per year for owners to pay for. Units and apartments are generally located in areas with high demand and proximity to employment zones, generating high rents and yields, as evident in the Melbourne CBD apartment market during February.
As interest rates are low and weekly median rents are strong, both types of dwelling investment are in hot demand by investors across the country.
