Earlier this month, we reported that many cities in Australia were experiencing an upward pace in rental income.
A lot of cities saw a sudden spike in asking prices for rents, following a low during COVID-19. Investors with rental properties were looking at huge profits.
However, this sudden rise in rental prices has not reflected evenly in rental yield across all cities.
Major cities like Sydney and Melbourne have seen a decline in their rental yield since last year.
Comparing the rental yield for the first quarter of 2020 and 2021, Melbourne has gone from 3.38% to 3.02%. This decrease is the highest among all cities; the yield figure of around 3% is also the lowest.
Outside Sydney and Melbourne, the two capital cities with an increase in rental yield are Perth and Darwin, with the respective rental yields of 5.11% and 5.63%. The rental yield percentage for Darwin is the highest across all cities.
This recent development shows investors are better off if they purchase an investment property outside of the major hubs. Some cities and regions are unfazed by the trend that major cities have caught on to, so investing in these areas is a better choice.
While it might not be possible for people with jobs and ties in Sydney and Melbourne to think about moving out altogether, they can purchase investment properties outside the area.
Rentvesting to places where yields are much higher than the city you live in is also a reasonable investment strategy that most people are applying.
Home loans for investment properties are currently at lower interest rates. Hence, investors can earn greater profits for themselves now more than ever.
We at Home Loan Experts can assist you through your home loan process for an investment property. Our expert mortgage brokers are always here to help.
Call us on 1300 889 743 or enquire online today!