Highest Rental Yield in Australia
The Australian property market saw a drop in prices in 2022. However, by August 2023, the market has reached the $10 trillion mark, and it continues to grow in September. Thanks to the property market rebound investors can enjoy some of the highest rental yields in Australia this year.
In the search for the best yield possible investors often look towards commercial buildings and single-family houses. While a tried and tested high rental yield option gets overlooked by a vast majority of investors. Let us introduce you to our rooming houses which are regularly fetching up to 8%+ rental yield here in Brisbane. To learn more about our rooming houses and how they can get you 8% return feel free to watch our Free MasterClass.
At The High Yield Property Club, we specialize in helping our clients buy wholesale rooming houses that have an 8%+ rental yield. For investors who simply don’t have time to acquire land, build rental units, and rent them out, our rooming houses offer a reliable yet simple investment solution. If you want to learn more about how you can get the highest rental yield in Australia, we suggest you keep reading until the end.
Understanding Rental Yield
Before we get into the best rental yield percentage, it is important to understand what this number represents. Gross rental yield shows the percentage of the property value that an investor can earn as rent in a year before deducting the expenses.
So when we talk about rental yield in this article we are referring to how much return on investment you can expect from a rental property. The higher the rental yield of a property is the more attractive it is going to be for an investor.
To calculate the gross rental yield of a property all you need is the market value of the property and its rental value.
For example, if you have a property with a total value of $1,000,000 and it gives you $30,000 in annual rent then you can use the following formula to calculate the rental yield:
Annual rent / Total market value of the property x 100
8%+ Highest Rental Yield Australia - Rooming House Walk Through
$30,000 / $1,000,000 x 100= 3%
You can use this formula and your own rental property’s values to find out its annual rental yield before expenses.
What is a good rental yield in Australia?
When evaluating the profitability of a real estate investment, the property’s rental yield is one of the key metrics that can tell you about its future returns potential. The rental yield you can expect will depend on many factors such as the location of the property, market conditions, ease of access, and the type of property. A good rental yield in Australia would be anywhere between 5% to 8% with 8% being the strongest yield you can expect in a capital city.
This percentage comes especially handy when comparing different properties to invest in. However, it is not always easy to reliably predict a property’s rental yield. That is where The High Yield Property Club comes into play. We are helping investors in achieving the gold standard 8% rental yield benchmark thanks to our tried and tested investment strategy. If you were having trouble finding properties that have high rental yield potential then we can help you achieve your investment goals.
Which capital city has the highest rental yield in Australia?
Brisbane can offer high rental yields combined with high capital growth if your investment is structured as an 8%+ return rooming house.
Despite the recent drop in property prices across Australia, the prices in Brisbane remained comparatively stable. Here are some reasons the Brisbane property market is an attractive option for investors looking for high rental yield:
- Brisbane has a solid economy fuelled by high-growth industries such as finance, technology, and tourism.
- The population of Brisbane is growing as people from other cities of Australia and migrants move to the city. With the rapid population growth, the demand for rental properties is also on the rise.
- Infrastructure development projects such as roads, public facilities, and transport networks have boosted the property value in Brisbane.
How do Rooming Houses In Brisbane offer one of the highest rental yields in Australia?
With the cost of living rising rapidly in Australia, people are looking for more affordable living solutions that don’t compromise on facilities. Rooming houses offer the perfect option for people with different lifestyles to rent and therefore the demand for these rental units remains high.
A rooming house can have up to five tenants living in the same building but they have their own separate space. Tenants will pay anything from $330 – $420 per room for a near new rooming house suite. Which is $1,650 – $2,100 per week or $82,500 to $105,000 per annum.
Rooming houses in Brisbane are ideal for single individuals who are looking for an affordable place to rent. But regular rooming houses you find in Australia may not get you the 8% rental yield because they lack the amenities and features to fetch that kind of return. The High Yield Property Club has perfected the art of building high rental yield rooming houses. Here is some of amenities and features of our purpose-built rooming houses:
Modern design:
Our rooming houses create great ambience with attractive designs that enhance the value of the property. We have refined our rooming house designs over the past 10 years of building properties for our clients.
Our current rooming house designs are at par with large family homes in terms of the curb appeal of your investment.
Smart entry:
Each unit has smart electronic doors installed at the front and back for easy access. In addition, the doors to the separate living spaces have dedicated electronic look locks that don’t require any keys to enter. Tenants can simply enter the unique pin to enter the units and their designated space which adds to the safety and convenience for the residents.
Well-planned structure:
Our rooming houses have five separate living spaces that offer much-needed privacy to tenants. Each room is approximately 30 square metres and has the features and amenities to comfortably and practically fulfil the needs of a single person.
Besides the small kitchenette allowance in each room rooming houses also have a larger shared kitchen. There is a shared laundry room with washing machines.
Solar powered electricity and high speed Wi-Fi facility available in all our units which are covered in the rent.
Each of the five rooms in our rooming houses is lockable and they are spacious enough to accommodate one person comfortably. All these facilities are meant to ensure that your property doesn’t become vacant often.
Prime location:
Our rooming houses are class 1B construction in the Brisbane City Council area. Tenants have access to all major amenities which further increases the income potential of our rooming houses.
Solar energy:
High Yield Property Club offers rooming houses with solar energy which makes them even more attractive to tenants. Not only does solar energy bring down the energy cost but they also enhance the property value for the owner.
Why do property investors love rooming houses?
By now we have established that rooming houses are a great investment option for investors looking for the highest rental yield in Australia. Being purpose-built for single working-class individuals our rooming houses are highly sought after by the target demographic. Since single individuals prefer single-bedroom spaces, rooming houses are in high demand in the Brisbane City Council area. However, the 8% rental yield is not the only reason investors love rooming houses.
Here are some detailed reasons investors have found rooming houses Brisbane as amongst the highest rental yield in Australia:
Tax depreciation benefits for investors:
A major reason Australian investors like to invest in rooming houses is the tax depreciation benefits. Owners can claim the tax deductions on their payable property taxes if they own a rooming house.
So even if the property value goes up in accounting terms the building and fixtures installed in it depreciate. Owners can claim the loss in the value of these fixtures and assets as a tax depreciation benefit. This tax depreciation can help investors in reducing the amount of taxes they have to pay each year.
Reduced vacancy risk:
Another reason why High Yield Property Club’s rooming houses in Brisbane are popular among investors is that they have a low vacancy risk. Unlike a traditional rental property where you have a single lease agreement, with a tenant rooming houses have multiple lease agreements. So even if one tenant ends their lease agreement 4 other tenants are giving you a steady cash flow.
As long as your rooming house is being managed by a highly experienced rooming house property manager (we can provide recommendations), the rooms won’t stay vacant for long. You will still have rent coming in from other tenants until you fill the vacancy which is not possible if you have a single lease agreement.
Affordable accommodation for singles are in high demand:
As mentioned above the cost of living is on the rise and more and more single individuals are looking for one-bedroom spaces to rent. Rooming houses such as the ones we offer come equipped with all the amenities that an individual might need, and provide easy living, private sanctuaries that singles enjoy living in.
Rooming houses appreciate:
While most investors choose rooming houses for the steady cash flow there is an added benefit of capital appreciation with our high yield rooming houses. So investors can not only enjoy cash flow but they can also benefit from the increase in the Brisbane property market’s value.
Benefits you get by investing with High Yield Property Club
Now that you know that the highest rental yield in Australia is easily possible by investing in our rooming houses you are probably wondering why you should make your investment through us. Here are just some of the major benefits you get by investing with High Yield Property Club:
Here are some detailed reasons investors have found rooming houses Brisbane as amongst the highest rental yield in Australia:
We save your time:
If you are like most investors you probably don’t have a lot of time to commit to finding land, hiring builders, and overseeing the construction project. A major benefit of investing with High Yield Property Club is that we take care of every single aspect of rooming house development for you from start to finish on your behalf.
Planning, designing, and developing a profitable rooming house requires knowledge and experience not to mention time. Since we have been doing this for more than a decade, we know what locations to choose, what designs to use, and what features to add to a unit. Even if you have all this knowledge on hand, it still takes a lot of time to execute the development of your investment property.
By working with High Yield Property Club you can keep your focus on other commitments which we handle in the development process.
We can help you build a wholesale rooming house:
Being a part of the industry for many years and having developed many rooming houses we have access to wholesale prices for materials and fixtures. Not to mention we have strong business relationships with the top builders which allows us to complete a rooming house project at an overall lower cost. We can help you build a rooming house at roughly the same cost as building a 4-bedroom home.
Unless you have the contacts we have with suppliers, builders, and property managers it can be difficult for you to complete a project at such high value for money. Despite our affordable construction, we don’t compromise on the quality and amenities of the rooming house.
Additionally, many of our clients are able to revalue immediately after tenanting, which provides them an equity uplift. This allows them to go through the process again soon after, and fast track their portfolio building without the common problems of running out of serviceability or falling short on equity.
Best utilization of land:
While we build rooming houses they look very similar to a standard home in terms of curb appeal. However, the way we arrange the rooms, kitchens, laundry areas, and other spaces within the unit offers the highest privacy level and comfort to tenants.
Our 8% + Wholesale Rooming House System™ has worked for many investors in the past and it continues to work despite the ever-changing property landscape.
We help you build a legacy:
There is nothing better than knowing that you have an asset that you can pass down from generation to generation. At the High Yield Property Club we can help you build generational wealth on top of a steady income stream.
Every single rooming house we build is a long-term asset and you can expect it to last for years to come.
What does the future look like for rooming houses?
So we have established that rooming houses have seen high demand and investors have been enjoying high rental yields from these multi-tenant units. However, it is natural to wonder what the future holds for rooming houses. As an investor, look at the long-term demand of a property type before you invest in it.
To understand the future demand of rooming houses we have to look at some relevant trends of the Australian housing market. Survey findings showed that 1 in 4 people in Australia live by themselves which means a single room is the ideal amount of space for them to live in. Almost 25% of the households in Australia are single households.
Judging by the recent rise in lone households it is safe to say that the demand for rooming houses is going to be strong in the future. Besides rooming houses are a relatively new concept and not many people are in on the income potential of this investment. As more investors learn about the high rental yield of these multi-tenant units you are going to see a rise in the number of rooming houses especially in capital cities.
We are offering you an opportunity to capitalise on the income and growth potential of rooming houses before the rest of the investors catch on. Even with more rooming houses being built, there is still a gap between the supply and demand for affordable rental spaces. So the rooming houses are highly likely to still be in demand for a long time in the future.
How do you achieve the highest rental yield in Australia?
By now it should be clear that one of the best ways to achieve the highest rental yield in Australia is by developing a rooming house using the High Yield Property Club’s 8%+ Wholesale Rooming House System™.
Our property managment partners further enhance the rental yield by vetting the tenants and drafting rental agreements that are beneficial for the investor. A well-constructed rooming house planned, and built by High Yield Property Club can fetch between $82,500 and $100,000 per year.
Conclusion
If you came to this article looking for answers about the highest rental yield in Australia and how to find it this article should have answered your questions. High Yield Property Club’s Director Kevin Doodney is a pioneer in the smarter smaller home revolution, and has had over 10 years of experience in developing the concept and designs in Brisbane.
While it took a lot of time and effort to make the rooming housing concept into a winning formula for investors, it has now become one of the highest rental yields in Australia. If you were having a hard time finding an excellent property investment that can help you get the highest yield possible then we hope you have found your solution by now.
If you still have questions about our rooming houses and how you can become the owner of a high yield rental property then get in touch with us. Or you can watch our 90-minute 8%+ Rooming Houses Video Masterclass to learn everything about our high rental yield rooming houses.