Best Area Under $350K with high yield

[Gendry]

In a similar vein to the "under 200k good yield thread", I am looking for advice on where people think the best properties for under $350k are with a good percentage yield.

I live in Melbourne and would ideally like something nearby, but haven't found much yet. Am starting to look elsewhere but am interested in people's opinions as to what area.

Thanks, Gendry

 

[Spades]

Hi Gendry,

Maybe look at FTG,Belgrave,Selby etc.

Eg:needs a Reno,dual access on 2 titles and on 1/2 acre.

http://www.realestate.com.au/property-house-vic-selby-117251011

Cheers Spades.

 

[A Jeremy]

What definition of the subjective word 'best' are you going by?

 

[Gendry]

I guess best = a good yield (5% and up) with some decent chance of capital growth.

I'm looking into one bedroom flats. Brisbane is somewhere I'm thinking of (seems hard to get a higher yield in Melbourne) but I am curious about other areas

 

[jpcashflow]

One bedroom is a bit dangerous in my opinion and for a couple of reasons:
1) Limited capital growth
2) Your target market will be very limited for both tenants and future buyers for your property.
3) I bet there would be some sort of body corporate attached to the one bedroom so suddenly your decent yield might be eaten up be body corrp fees "etc"

 

[Gendry]

Thanks for the reply jpcashflow. Hmm those things I had considered, but thought they were more applicable to things like student apartments than just a standard one bedroom flat.

Why would corporate fees be necessarily higher for 1BR than 2BR, for example? And why would the target market be much more limited for 1BR?

I can understand the argument for the 2BR unit. I just figured there would be demand for a 1BR due to students and young professionals, as long as it was in a very good location and of decent size.

However, I am new to this! so am appreciating the responses

 

[jpcashflow]

Hi...

Any time... its always good to share some ideas..

 

[Brady]

Not Adelaide

 

[Chris B]

In a similar vein to the "under 200k good yield thread", I am looking for advice on where people think the best properties for under $350k are with a good percentage yield.

I live in Melbourne and would ideally like something nearby, but haven't found much yet. Am starting to look elsewhere but am interested in people's opinions as to what area.

Thanks, Gendry

As you probably realise, yields are currently pretty low in Melbourne and we may need an increase in interest rates (or shortage of property) to start to push up rental prices. If you look at regional towns, you will find some better yields.

Generally speaking, if the yield is above average, the CG is likely to be less.

You might want to consider the granny flat option (or something else that can easily generate 2 incomes).

 

[Corey Batt]

Not Adelaide

Remember, the key is to not mention Adelaide until we all own a couple postcodes a piece.

 

[Brady]

Remembr, the key is to not mention Adelaide until we all own a couple postcodes a piece.

Haha deal!

Adelaide is bad, stay clear.

3 bedroom 1 bathroom 600sqm block in very good area 15km from Adelaide CBD $350,000

4 bedroom 2 bathroom 700sqm block in nice area 16km from Adelaide CBD $315,000

3 bedroom 1 bathroom 900sqm CORNER block in ok area 16km from Adelaide CBD $300,000

 

[rabidz]

In a similar vein to the "under 200k good yield thread", I am looking for advice on where people think the best properties for under $350k are with a good percentage yield.

I live in Melbourne and would ideally like something nearby, but haven't found much yet. Am starting to look elsewhere but am interested in people's opinions as to what area.

Thanks, Gendry

What about a 1 bedroom apartment / unit ?
I think it's around the price range $350k, in Melbourne..

 

[S.T]

Haha deal!

Adelaide is bad, stay clear.

3 bedroom 1 bathroom 600sqm block in very good area 15km from Adelaide CBD $350,000

4 bedroom 2 bathroom 700sqm block in nice area 16km from Adelaide CBD $315,000

3 bedroom 1 bathroom 900sqm CORNER block in ok area 16km from Adelaide CBD $300,000

Whats the yield like from those examples though? OP is asking for high yield.

 

[mumbai]

I am interested in knowing that too.

 

[S.T]

Thanks for the reply jpcashflow. Hmm those things I had considered, but thought they were more applicable to things like student apartments than just a standard one bedroom flat.

Why would corporate fees be necessarily higher for 1BR than 2BR, for example? And why would the target market be much more limited for 1BR?

I can understand the argument for the 2BR unit. I just figured there would be demand for a 1BR due to students and young professionals, as long as it was in a very good location and of decent size.

However, I am new to this! so am appreciating the responses

With 1 bedroom you only have students and young professionals. Not many couples would rent. With 2 bedroom you open up to couples, friends sharing, single mums etc your pool grows. The body corporate fees are a bit more easily absorbed as the rent is higher.

I think there still is good buying of older BIGGER (over 50m2) 1 bedroom apartments in fantastic positions though.

 

[Brady]

Whats the yield like from those examples though? OP is asking for high yield.

$350,000 would rent for $350+p/w ~5.2% yield

$315,000 would rent for $360+p/w ~5.9% yield

$300,000 would rent for $300+p/w ~5.2% yield

Each of these could do with a reno which would see rental increase + CG. All could likely be developed at some point.

 

[mumbai]

pretty good. How are the vacancy rates and PM fees?

 

[tobe]

lots of couples will rent a one bedroom apartment, especially ones with a good layout over 50sqms.

 

[Brady]

pretty good. How are the vacancy rates and PM fees?

Haha geez!

As per sqmresearch - vacany rates

$350k - 2% (note thats 8 properties vacant, very OO suburb)

$315k - 1%

$300k - 1.2%


PM fees for the area, shouldn't pay more then 7.7% (inc gst)

 

[Spades]

Hi Gendry,

With your price range,what about Bundoora?

Roughly 18km's to the Cbd,has Uni,decent shops,tram etc.

You may even pick up a house if you upped the budget.

Just throwing it out there.

Cheers Spades.