podcast

Mistakes investors make when looking at rental yields

Nick Viner - Buyers Domain

{{youtube id="RqdCGhnsQCA"}}

Investors who are too focused on high-yielding properties could be limiting their long-term profit potential.

Inner city investors give too much weight to the importance of rental yield at the expense of chasing good capital growth. Remember that with property, you're really only going to get the big bucks if you lock in good capital growth. Rental yields in the long run isn't so much of a consideration. So what you really want to find is a property that's got a reasonable rental return, because of course you want to pay the bills as you go along the way, but a property that offers good prospects for capital growth. An example of what not to buy perhaps would be something like a small studio on a major arterial road. Now it may be yielding in excess of 5% per annum but your capital growth is probably not going to blow you away. Conversely, a really popular two bedroom unit that ticks everybody's boxes because it's got a balcony, a lock up garage, it's in a small boutique block, it's within 5 - 10 kms of the CBD. That's something that's probably got a lot more universal appeal and therefore better capital growth potential.

Listen to other instalments of The Smart Property Investment Show:
Episode 89: Renovating as a couple: two young investors share their story
Episode 88: Everything you want to know about the short-term rental market revealed
Episode 87: BONUS EPISODE: Former Olympian shares his property development know-how
Episode 86: How a former Olympian found new sport in property development: Ed Fernon's success story
Episode 85: Q&A session with Paul Glossop – more questions answered!
Episode 84: 'How I overcame dodgy builders to manufacture $100k in equity in less than a month'
Episode 83: BONUS EPISODE: Top Aussie broker’s tips for surviving changes to mortgage lending
Episode 82: The investment strategy that could allow this 32-year-old to retire TODAY
Episode 81: BONUS EPISODE: Secrets of the Perth market uncovered: invest now or wait?
Episode 80: Q&A session: SPI answers all your burning questions
Thank you.

Your enquiry has been sent to a local Aussie Mortgage Broker.

We will be in contact with you shortly.
Opps.

error occurred.
Unfortunately Aussie cannot attend to your home loan related enquiry at this stage as you must be a citizen or permanent resident.
Do you need help finding the right loan for your investment?
What Aussie do for you:
  • Give expert mortgage advice to help you find great investment loan deals
  • Help you maximise return by lowering financing costs
  • Save you time and effort by helping with the paperwork
First name
Last name
Location
Mobile Number
Are you an Australian Resident?
promoted stories

Top Suburbs

Highest annual price growth - click a suburb below to view full profile data:
1.
BLUE BAY 49.18%
2.
PAMBULA 43.5%
3.
BERKELEY VALE 42.74%
4.
POINT PIPER 40.52%
5.
NORTH TURRAMURRA 38.12%