5 towns to turn to in the hunt for positive gearing

He said these properties could be found Australia-wide, particularly as price growth slows and rents rise.

“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. This has led to high demand for a short supply of rentals, reducing vacancy rates and seeing rents grow, while in these areas property prices are also usually lower than inner city areas,” Mr Dimovski explained.

He stated that investor motivation to seek out positively geared properties could be linked to attempts to balance out their property portfolio. 

“While these properties don’t necessarily experience the high capital growth rates of other homes, particularly those in inner-city areas, the cash flow enables investors to be able to hold their higher growth, lower-yielding properties, hence balancing out their portfolios,” he said.

“Choosing a regional area where there is population growth and accompanying infrastructure, however, will lead to capital growth in these areas over the long term, as long as demand exceeds supply. 

“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, but careful selection is always important — you need to find a property that will be sought after by tenants.”

According to Buyers Agency Australia, the top five areas for finding positively geared investment properties right now are:

City of Logan, Queensland:

Half an hour south of Brisbane’s central business district, Mr Dimovski indicated that properties with a yield in the low 6 per cent range could be found in this area. The area possesses a vacancy rate of 0.4 per cent, meaning tenants are easy to come by.

Bundaberg, Queensland:

A great area for both high rental yields and capital growth, this town, located four and a half hours north of Brisbane, has a vacancy rate similar to Logan’s — 0.4 per cent — with Mr Dimovski sharing that a property he purchased for a client recently is returning a 6.7 per cent yield.

Townsville, Queensland:

North Queensland’s unofficial capital offers great opportunities to find positively geared properties, with Mr Dimovski noting that a recent purchase of his has resulted in a yield of 7.2 per cent. That’s despite vacancy rates here being slightly higher than Bundaberg’s, at 0.7 per cent.

Mildura, Victoria: 

North-west Victoria’s Mildura has a median house price of $415,000 and presents investors with market openings whereby they can acquire a positively geared property, according to the group. Currently presenting clients with yields over 6 per cent, it boasts a low vacancy rate of 0.6 per cent.

Kerang, Victoria: 

This rural town, located three hours north of Melbourne, provides investors with high rental returns allowing for solid cash flow; however, capital growth is slower. Yields can reach as high as 8 per cent, and a vacancy rate of 0.3 per cent means properties are being snatched up quickly.