Rental yields: Achieving the best returns on investment property

By the resi financial blog team, 18 October 2013

How to I get the best returns on my property investment

Most Australians at some point in their lives will have lived in a rental property. There are a number of benefits to living in a rental home, including the relative affordability of the property and lack of responsibilities.

However, have you ever thought of owning a rental property? Property investment and earning an income from your real estate is becoming an increasingly popular way to accumulate wealth across Australia.

With the cash rate currently sitting at a historical low, now could be the perfect time to look into investing in property. But one aspect of owning a rental property you need to consider is your overall rental yields and maximising the return on your investment.

Figuring out your gross rental yields for a year is as simple as dividing the gross annual rental income by your property's purchase value.

Manoeuvring your investment into a position where the rental income outweighs the property's expenses will help you to achieve a positive cash flow, which is effectively money in your pocket that can be used for a number of different things - including the payment of your mortgage.

Furthermore, achieving a decent rental yield can happen alongside your property's capital gain growth. Accumulating long term wealth while earning a weekly income from your property could be a great possibility for any potential investors out there.

Purchasing a successful rental property is a matter of watching the market and making your move at the right time.

For example, look into areas that are recording an undersupply of rental properties. With more tenants than there are rentals you are bound to have your property leased at all times, meaning your rental income will consistently be paid.

Get in contact with a home loan expert and seek advice about the types of finance that would suit your investment purposes, and to gain any insight into areas of potential worth.

Categories: Property Investment