High Rental Yields

I recently completed a renovation on a property in regional NSW. The four bedroom home had been vacant for six years. It required new plasterboard on the walls, a new kitchen, new carpets and floor coverings, new blinds and a complete clean and paint. I did most of the work myself (with the help of my faithful family); flat pack kitchen, watching plastering videos on YouTube, painting, laying carpet and a huge tidy up of the exterior. This may not seem to be that worthy of your reading time, but before you switch over to facebook, let me give you some numbers on this regional property... Purchase, renovation and holding costs total $241,000. I claimed depreciation on the renovation almost immediately to get much of my reno cost back. I lease this property to a young family (I had many apply) for $375 per week. This gives a rental yield of 8.1%, before I even consider the tax deductions each year.

When most people buy a property, they are put in a position that stops them from continuing on their investment journey with more properties. Negatively geared property generally stops you from buying more and bettering your financial situation. By purchasing regional properties that are cash flow positive, many investors have been able to fast track their path to financial freedom, as each property puts them in a better position than they were in before. Average rental yields across most parts of Sydney are today at or under 4%. Compared with many large regional cities that offer yields at, close to or above 6%, this can be the difference between having one investment property like the majority of property investors, or moving closer to financial freedom with several properties. 

Regional properties offer a multitude of opportunities. Whether you want to buy unseen, buy and DIY a reno, or buy a house and land package, there are opportunities for positive cash flow. Check out our facebook page for further articles examining this. 

P.S. The property was revalued 6 months later at $300, 000... and continues to grow...