- Buyer's agent Dragan Dimovski shares his top 5 locations for positively geared property
- Queensland and Victoria dominate rankings, as City of Logan is crowned number one
- Positively geared property becoming more popular among investor seeking lowered risk, says Mr Dimovski
A leading Australian buyers agent has shared his top 5 areas for investors seeking to obtain a positively geared property.
Dragan Dimovski, founder of the Buyers Agency Australia, says uncertainty in the market is prompting more investors to purse positively geared properties in a bid to reduce their risk level.
A positively geared property is an investment which generates more income than the expenses associated with ownership, including loan repayments, property management fees and rates.
“These properties can still be found all around Australia, particularly now that property price growth has slowed and rental rates are rising.”
Dragan Dimovski, Buyers Agency Australia Founder
According to Mr Dimovski however, regional areas are a gold mine of opportunity as several people are relocating to these areas amid lifestyle changes and the ability to work remotely.
“This has led to high demand for a short supply of rentals, reducing vacancy rates and seeing rents grow, while in these areas property prices are also usually lower than inner city areas.”
“A good rule of thumb to find positively geared properties is to look for investments that have a yield of at least six per cent, but careful selection is always important – you need to find a property that will be sought after by tenants,” added Mr Dimovski.
Mr Dimovski listed the following five locations as his top areas to buy positively geared properties:
Top 5 areas to buy a positively geared property
|Rank||Area||State||Prominent Market||Median house price||Median rent per week||Annual rental yield|
|1||City of Logan||QLD||Logan Central||$440,000||$380||5.0%|
Source: Ranking from Buyers Agency Australia, market data from Realestate.com.au
City of Logan, Queensland
Nestled between Brisbane and the Gold Coast just half an hour south of the Brisbane CBD, the City of Logan is Mr Dimovski top area to buy positively geared property.
According to Mr Dimovski, it’s possible to find properties with a yield in the low 6% range in Logan.
“I recently purchased a three-bedroom house in the suburb of Eagleby for $480,000. Following a $20,000 renovation it was rented for $590 per week, equating to a 6.1 per cent return,” said Mr Dimovski.
He added that the vacancy rate in the area is rather low (0.7% in the March quarter according to the city of Logan), making finding tenants easy for investors.
The coastal regional town of Bundaberg, situated four and half hours north of Brisbane, earns itself second place on Mr Dimovski’s rankings for its high rental yield s and capital growth.
“On behalf of one of my clients I purchased a three-bedroom house that was renovated 12 months ago on an 800 square metre block, just three minutes’ drive from town, for $355,000.
“With a vacancy rate of 0.4 per cent in the area, the property rents for $455 per week, equating to a 6.7 per cent return,” he said.
Third on the list is North Queensland’s unofficial capital of Townsville which is also praised for high weekly rents and annual rental yield.
“A recent purchase I made resulted in a huge yield of 7.2 per cent,” said Mr Dimovski.
“The three-bedroom house, which was in good condition internally, was bought for $295,000 and rented for $410 per week. The vacancy rate in the area is 0.7 per cent.”
“A three-bedroom house, which was in decent condition and on a large block of 765 sqm close to the town centre and shops, was purchased for $330,000 for one of my clients,” said Mr Dimovski, of a purchase in the Victorian town of Mildura.
“The property is rented for $400 per week, equating to a yield of 6.3 per cent, with a vacancy rate in the area of 0.6 per cent.”
Located three hours north of Melbourne, Mr Dimovski recommends Kerang for its high rental returns but advises that capital growth is slower.
“Just a few months ago I purchased a three-bedroom house on a 560sq m block in the area for a client for $278,000.
“It is rented furnished for $430 per week, equating to a massive yield of eight per cent! What’s more is that the vacancy rate is just 0.3 per cent, so rentals are snapped up very quickly,” concluded Mr Dimovski.