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Discovering the ideal investment property
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Navigating the intricate maze of investment properties can often feel like solving an ancient puzzle. With a myriad of factors at play, ranging from; the purchase price, yield, and capital growth to the depreciation benefits and rental demand
The journey to finding the perfect investment property is both complex and fascinating. Let’s unpack the elements that contribute to making an investment worthwhile. Currently, the Melbourne property market is showcasing an extraordinary trend: furnished student accommodations are emerging as the highest-yielding properties, boasting yields surpassing 9% in some instances. However, the catch lies in their acquisition; the diminutive size of these properties often imposes outright cash purchases, making them a feasible option primarily for those with self-managed super funds or recent financial windfalls. These properties are typically fetching between $350 to $400 per week on a $200k investment, which represents an intriguing opportunity for the right investor.
Command premium rents with stylish furnishings
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On the other end of the spectrum, modern furnished apartments in the vicinity of the CBD, especially those assets within the University Precinct, stand out as attractive alternatives. However, investors should keep an eye on the Owner’s Corporation fees which can significantly dent yields.
The key to driving success is in the details: stylish furnishings tailored to a professional or affluent student demographic can command premium rents. While car parks and extravagant amenities like gyms and pools are not deal-breakers, the overall presentation, and a pleasant outlook (definitely not a wall view) are crucial. With a promising 3–5-year outlook, such properties can yield approximately $750 per week on a $500k investment.
For those balancing yield with capital growth aspirations, our Business Development Team has identified that larger unfurnished two-bedroom apartments in inner suburbs are becoming increasingly appealing. These cater to high-income locals seeking quality living spaces. Features such as city views, a sizable balcony, and at least one car parking space (preferably two) significantly enhance their attractiveness. A sweet spot in depreciation benefits and a potential rental income of $900 per week from an $800k investment make these options particularly compelling.
Larger unfurnished apartments are increasing in appeal
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The evolving landscape of land tax has somewhat dimmed the allure of classic homes on large blocks. Conversely, new house and land packages in promising locales retain their charm for those eyeing tax advantages and capital appreciation. However, the shift towards townhouses closer to urban centres is undeniable, driven by their practicality and the qualitative living experience they offer. In these situations, the emphasis is on balancing bedroom count with ample living space, ensuring a layout that maximises natural light and includes modern amenities like island bench kitchens and double garages. Our team recognises that these properties which are within a 15km radius of Melbourne’s northern suburbs, can generate a return of $750 per week on an $850k investment.
Embarking on the journey to pinpoint your ideal investment property can seem daunting, but you’re not alone. MRE’s Business Development Management team is at the forefront, ready to guide you through the maze and help you align your investment choices with your goals.
For personalised advice and insights into securing the best investment properties, reach out to us on 9829 2900 – Your next investment breakthrough is just a phone call away!
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**DISCLAIMER
MRE is not a financial advisor and is not able to, nor does it, provide investment or financial advice. This content is strictly for informational purposes only, and you should not construe any such information as legal, tax, investment, financial or other advice. This content does not address or take your specific needs or circumstances into consideration. MRE strongly recommends that you should look at your own financial position, objectives and requirements and further strongly recommends that you engage the services of a qualified financial advisor or accountant for appropriate professional advice before making any financial decision.