Home prices are falling while interest rates are rising, but there are still some great investment opportunities out there for property buyers.
Buyers Agency founder Dragan Dimovski said investors were keener than ever to find positively geared properties - meaning investments in which the rental income is greater than the mortgage repayments.
“These properties can still be found all around Australia, particularly now that property price growth has slowed and rental rates are rising,” Dimovski said.
“However, regional areas often offer the best opportunities, with many people having relocated to these areas following COVID for lifestyle reasons and as the ability to work remotely has grown.”
Dimovski said the higher demand for regional properties, coupled with a short supply of rentals, presented a great opportunity for property investors.
“A good rule of thumb to find positively geared properties is to look for investments that have a yield of at least 6 per cent,” he said.
”But careful selection is always important – you need to find a property that will be sought after by tenants.”
Here are the top five areas for property investors, according to Buyers Agency Australia.
1. City of Logan, Queensland
Just half an hour south of the Brisbane CBD, you can still find properties with a yield in the low 6 per cent range in Logan, Dimovski said.
“I recently purchased a three-bedroom house in the suburb of Eagleby for $480,000,” he said.
“Following a $20,000 renovation, it was rented for $590 per week, equating to a 6.1 per cent return.
“The vacancy rate in the area is just 0.4 per cent, which means it’s easy to find tenants.”
2. Bundaberg, Queensland
Dimovski said the regional coastal city of Bundaberg, around four-and-a-half hours north of Brisbane, was a great area for both high rental yields and capital growth.
“On behalf of one of my clients, I purchased a three-bedroom house that was renovated 12 months ago on an 800 square-metre block, just three minutes’ drive from town, for $355,000,” he said.
“With a vacancy rate of 0.4 per cent in the area, the property rents for $455 per week, equating to a 6.7 per cent return.”
3. Townsville, Queensland
Dimovski said Townsville also offered great opportunities for finding positively geared properties.
“A recent purchase I made resulted in a huge yield of 7.2 per cent,” Dimovski said.
“The three-bedroom house, which was in good condition internally, was bought for $295,000 and rented for $410 per week. The vacancy rate in the area is 0.7 per cent.”
4. Mildura, Victoria
Dimovski said Mildura in northwest Victoria was another area where positively geared properties could be found.
“A three-bedroom house, which was in decent condition and on a large block of 765sqm close to the town centre and shops, was purchased for $330,000 for one of my clients,” he said.
“The property is rented for $400 per week, equating to a yield of 6.3 per cent, with a vacancy rate in the area of 0.6 per cent.”
5. Kerang, Victoria
Just three hours north of Melbourne lies the small rural town of Kerang, which Dimovski said also provided high rental returns.
“Just a few months ago, I purchased a three-bedroom house on a 560sqm block in the area for a client for $278,000,” he said.
“It is rented, furnished, for $430 per week, equating to a massive yield of 8 per cent.
“What’s more is that the vacancy rate is just 0.3 per cent, so rentals are snapped up very quickly.”