Aspiring investors may be able to purchase a well performing investment property within their local neighbourhood but it might just be worth investigating opportunities in alternate locations.
For a lot of investors, buying in the local area might be an easy option. They know the area, they can visit properties easily and they might even have some real estate connections.
Indeed, according to property investor and author John L Fitzgerald, more than a quarter – 26 per cent – of property investors buy within their own postcode.
But maybe, for some investors, they stick to their own market because they never actually thought of investing anywhere else. But market fundamentals, capital growth prospects, and of course rental returns, can differ greatly according to different markets.
According to the latest rental figures from RP Data, Darwin properties are currently bringing in very attractive rental incomes.
Darwin houses have a median advertised weekly rent of $520 while units have a weekly rent of $430 a week; such rents are returning rental yields upwards of 5 per cent. This compares to a median advertised rent of just $320/$280 for Adelaide houses and units respectively.
Canberra and Sydney are bringing in the next highest rents, with median advertised weekly rents for houses sitting at $495 a week for Canberra and $450 for Sydney.
Of course, it’s crucial to look at the actual rental yield – that is the real return of the rent, taking into account the cost of purchasing property. But what these figures highlight is simply how contrasting markets can deliver such contrasting returns.
So if you’re considering purchasing an investment property it may well be worth checking out the opportunities available in different markets.
For comprehensive data Australia’s varied property markets pick up a copy of the First Property Buyer magazine – available in most good news agencies. Each month, you’ll find 18 pages dedicated to property market indicators for almost every suburb in Australia, detailing median property prices, quarterly and annual price performance as well as rental yields.