Past and Current Yield - Future Yield?

[quoll]

I'm working my future income projections as units of rent.
So for a nice income I need 10 properties that would return $200 per week in todays market OR 15 that return a bit less say $130 per week.

The only thing I'm not sure about is what the rent will do in the future?

There is no way to know until it happens but what has happened in the past.

Well we rented back in the earlier 90's a cheapish 3br house for $120 it was bought for about $60k. The same place sold recently for $130k but the rent is only $150.

If this is normal I will have to change my model a bit.

What was rent like 20-30 years ago?

 

[Les]

G'day Quoll,

Thinking back to the Jan Somers weekend, I recall her mentioning that yields (over time) have been declining. And with property doing it's usual deal of increasing at ~2% above inflation, while rents are (of necessity) somewhat pegged at inflation rates, this would make sense to me.

Make your Excel spreadsheet a bit more conservative - it is better to have a nice surprise than an unpleasant one.....

Regards,

 

[sctpc]

Back in the 90s the rent was 10% + now its 5 or less in melbourne the times when rents go up is when interest rates go up and people slow buying there own houses so rental demand goes up. Be conservative in your plan and then you can only get a nice suprise.

 

[Bill.L]

Hi all,

To answer the question, we payed $55 pw in 79 and 80 then 65pw in 81. This for 2 1/2 bed house in Melb suburb of Burwood( Camberwell side). In 89-90 we rented out an IP at $85 pw, but this was to relative and about $25 pw below market rent at the time.(Mulgrave area)

This makes the gross yields at about 6% in 81(the house we rented sold for $55,000 in 81), and about 5% in 1990.

bye

 

[quoll]

I like that advice.
I wouldn't mind having more income in the high interest rate cycle but if you have less, it just ain't as nice.

Does anyone know of rent yield information for earlier than 10/15 years ago?

Thanks
Graeme

 

[quoll]

Thanks Bill

That is the sort of info I was after.

Graeme

 

[jahn]

Quoll
How far do you want to go back

Ppor in the Central Coast 1970 built for 12,500 (land and house) and rentable for $15 weekly. 6.24 gross yield. Sold it.
jahn

 

[quoll]

jahn
Not sure how far back I realy wanted but going back to the 70's has helped.

It seems from this that the rent fluctuates between 5%-10% which would put some crapy earners at 3%-8% and the good cashflow places at maybe 7%-15%. I'm happy working out my figures on something similar to todays situation with low interest rates and low yields.

As long as I can afford a drink, some food, entertainment, new car, nice toys in my retirement I'll be happy.

Oh, retirement is when you can stop work because it shits you off instead of staying due to mortgage and commitments. Have a few months off and do some more income earning stuff when you are bored with doing very little. (surfing, golf, shopping with wife, gardening, etc)

Cheers.

 

[jahn]

Quoll
Retirement sounds good.
Don't forget that at the present moment, IPs with gross yields of around 3% (I believe in Cap Cities) to over 10 to 15% really depend on where, when, and how you buy them. Not expert on this subject, but I suspect that this variation has existed for a loooong time,
jahn