Tag Archives: rental yield

Why should you should consider renting?

Why should you should consider renting?When it comes to living in Australian property, purchasing with home loans seems to be the default choice. For many, there’s a general impression that renting property is some kind of short-term bridge between leaving your family and buying your first home.

But if you’ve had your eye on real estate news for the last few years, you’ll notice that purchasing real estate in Australia is getting increasingly difficult, particularly in certain capital cities.

While there are many great perks and benefits from owning property, there are also key advantages to renting that make it an appealing option.

Affordability

Affordability is a big factor for anyone. In this field, the case for renting seems to have the upper hand.

The Housing Industry Association reported in June that the National Affordability Index dropped by 2.9 per cent. Sydney and Melbourne saw the greatest decreases, at 6.9 and 9.1 per cent respectively. This demonstrates that housing prices are rising faster than people’s earnings.

While people with low interest home loans can still find ways to adapt and purchase property, it outlines just how comparatively affordable renting could be.

The deal with yields

The best way to observe this comparison is not just to examine rental rates, but to take a look at yields. Sure, rates can give you a snapshot into how much it’ll cost you per week, but this alone will not give you a holistic view.

Yield figures on the other hand, will show you how renting stacks up to buying property in the current market, which is the real contest here. This can be defined as the percentage of rental income to the home’s purchase price.

For instance, CoreLogic RP Data research notes that the median rental price for a Sydney house was $610 in July. This figure might seem high and have you consider buying instead.

However, figures reveal that Sydney’s rental yield was down 0.2 per cent over the quarter, and decreased by 0.6 per cent over the year to July. This shows that rental income were in fact lower than they should have been when considering property prices.

This is true for many of the other capital cities as well, and is a sign that renting could the far more affordable option in relativity to housing prices.

Stable rates

Another good reason to look at houses for rent is the fact that rates have been mostly stagnating. Australia’s combined capital cities experienced a 0.7 per cent decline in rates over the September quarter, with every single one recording negative change.

Melbourne has lead the charge in rental growth over the year, showing a 2.1 per cent rate increase in the year to September but clearly, this figure is hardly something to worry over.

With stable rates that are lower than property prices would have them, anyone who may struggle with mortgage repayments should consider renting instead.

3 ways to get more out of your rental

3-ways-to-get-more-out-of-your-rentalMany people choose to invest in property because it is a great tactic to build wealth and secure their futures financially. However, as it’s an investment,  owners should look for ways to maximise the returns on their properties. First National property managers always do. If you’re looking for strategies to get the most out of your rental property, here are three tips to help you on your way.

Hire a professional

Have you ever had to bang on a tenant’s door to pick up missed rent? Has your phone gone off at midnight after a tenant’s hot water cylinder has burst for the third time this year? Managing your own rental property can be a difficult task, especially if you have a vast portfolio. Instead of trying to juggle multiple properties at once, enlist the help of a professional property manager to take a few off your hands. Property managers have the knowledge, time and skill to ensure your investments and tenants are taken care of.

Review your rent

It may have been years since you last reviewed the price you’re charging for your rental property. The important thing to remember is that the market can change quite often. Fluctuations in vacancy rates and median rents can all impact how much you can charge for your property, and you may end up charging too little. Review your rent on a regular basis to meet the market. Compare your home with other rentals similar to your property, or obtain a rent appraisal from an agent.

Regularly refresh your rental property

The key to ensuring your rental property remains tenanted is to keep it in good condition. By staying on top of maintenance issues and refreshing the interior, your investment can be kept looking great for longer. At the end of each tenancy, you might want to give the home a quick lick of paint, have the carpets cleaned and the garden reworked. You might even be able to charge a bit extra for rent, while also making your home look more appealing to tenants.