With interest rates as low as currently, rental properties offer a high return. When you pay only 3.5 to 4% of your mortgage, you only need a return of more than 4% to make instant profits – and many Australian suburbs offer twice as much returns.
Conversely, if you invest in a market where demand for rental housing is low, you may face prolonged holidays and financial hardship. During this period, the number of tenants willing to rent at the price indicated may be insufficient, which requires you to reduce your rent charged.
In an interview with Your Investment Property, Property Power Partners General Manager John Lindeman confirms that if your strategy as a real estate investor generates high cash flows, demand for rental housing is essential to your success.
Asked about the measures to be taken so that investors can assess housing still in strong rental demand, it is useful to use indicators such as rent increases, low vacancy rates and high rental yields. some suburbs. In addition, it is important to determine the type of rental demand in a region by interviewing local property managers.
"For example, vacation areas may have a high demand for rents during peak season, but low demand for rents at other times." A construction project such as a road or a The railway may increase the demand for workers' rents, but only for the duration of the project, is in progress, "he says.
According to Lindeman, part of the highest rental demand is in the least likely locations.
He gives the example to Risdon Vale. It's a suburb of Hobart and it's also where the Tasmanian Maximum Security Prison is located – making it what most people consider a very unattractive place to live and dangerous.
Massive walls line the perimeter of the prison, with razor wires, and the night sky is penetrated by guard towers, howling ferocious watchdogs and the constant threat of escapees fleeing into the city. suburbs, says Lindeman.
The interesting part, however, is that Risdon Vale has the highest demand and consistent rental returns in Hobart despite its disadvantages.
The demand for housing comes from wives and partners of inmates who rent properties in Risdon Vale to get closer to their relatives incarcerated during conjugal and family visits.
"The paradox is that the higher the frequency of robberies, murders, and other serious crimes in Tasmania, the greater the demand for rental housing in Risdon Vale will be," says Lindeman.
Interest rates are at their lowest for over 50 years, so there are excellent rates available. The best thing to do is to compare the rates of all the lenders. Let us help you solve this problem – Compare home loans now
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Kariong
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tank
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Torrensville
,
Eagle Valley
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North Lambton
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