Where investors can buy now and instantly pocket hundreds a month in rent

Softer property prices and incredibly tight rental markets have created a scenario where would-be investors could buy now and instantly bag cash.

New data analysis by PropTrack comparing median houses, median monthly rent, and average mortgage repayments shows there are a number of areas across Australia where the potential gross monthly return is in positive territory.

“Rental markets are extremely tight right around the country at the moment,” PropTrack economist Angus Moore said.

“Rental vacancy rates are sitting between 1% and 2% in each capital city, which is extremely tight. As a result, we’re seeing rent prices grow very quickly.”

At a national level, advertised weekly rents on realestate.com.au surged by a staggering 6.7% over the past year.

A mass exodus of property investors during Covid, on top of surging tenant demand and dwindling housing supply, has sparked a rent crunch in most parts of the country.

An opportunity help – and benefit

Private landlords account for the bulk of rental dwelling supply, so a reduction in activity can have painful consequences for tenants.

The latest PropTrack Home Price Index showed values at a national level have slipped 4.51% from their peak in March 2022.

Falls have been particularly pronounced in Sydney, down 7.51% from its peak in February 2022, and Melbourne, 5.79% lower year-on-year.

Demand for rental properties is well up, which combined with softer prices, offers would-be landlords a prime opportunity.

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Across most capital cities, the PropTrack data analysis shows a number of suburbs that could offer a gross monthly rental return.

There are no suburbs in Greater Sydney, given the city’s hefty home prices.

However, there are a number of options in regional New South Wales – as there are in other non-metropolitan areas across the country.

“Regional areas often carry higher gross rental yields, in part because they are smaller and thinner rental markets,” Mr Moore pointed out.

“But they also carry a higher risk of vacancy – although that’s probably less of a concern at the moment, with vacancy rates sitting at very low levels across the country.”

Some regional locations are particularly volatile, especially those leveraged to one main industry, such as mining.

Take the Pilbara region of Western Australia, where some pockets currently offer investors up to $1700 in potential gross returns.

“While they might have solid gross returns, they can carry significant risks,” Mr Moore said.

In addition, he pointed out that a gross return is just that and doesn’t take into account other expenses that come with property investment.

“In particular, this doesn’t take into account other ongoing expenses like strata fees, maintenance, council rates, taxes, and so on.

“These will differ for different areas and for different individual properties, so it’s important to do your homework before making any decisions.”

New South Wales

There are no suburbs in high-priced Sydney that are likely to deliver an investor a cash flow positive return, the data indicates.

However, there are solid prospects in the regions, including in the town of Broken Hill where a house could bag an investor up to $600 per month gross.

“You’ll often hear me say Broken Hill is an outback oasis,” local agent Mitch Halpin from First National Real Estate said.

“It’s in the middle of nowhere and has a great sense of community. There’s loads to do and plenty to see, from cafes to the art gallery and sunset trail walks it caters for all.”

Menindee Lake is an hour away, offering plenty of action for those who love water sports, camping or fishing, Mr Halpin added.

A severe rental shortage has collided with growing demand, putting upward pressure on prices.

“We always have a strong investor market here in town,” he said.

“Over the past two to three years we have found investors are happy to spend more on buying a better quality home, which in turn has less maintenance.”

In terms of units, the Queanbeyan suburb of Crestwood, abutting the ACT border, could deliver a $420 gross return each month, the data indicates.

And Muswellbrook in the Upper Hunter Region could deliver investment unit owners $190 per month gross.

The data

Source: PropTrack

Suburb	Type	Median price	Median monthly rent	Monthly mortgage repayments	Gross monthly return
Broken Hill	House	$175,000	$1,360	$760	$600
Moree	House	$252,000	$1,690	$1,090	$600
Cobar	House	$175,000	$1,230	$760	$470
Boggabri	House	$287,000	$1,660	$1,240	$420
Wellington	House	$265,000	$1,550	$1,150	$410
Narrabri	House	$410,000	$2,080	$1,770	$310
Narrandera	House	$280,000	$1,520	$1,210	$310
Manilla	House	$295,000	$1,550	$1,280	$270
Narromine	House	$340,000	$1,700	$1,470	$230
Gunnedah	House	$400,000	$1,950	$1,730	$220
Crestwood	Unit	$334,000	$1,860	$1,440	$420
Queanbeyan East	Unit	$390,000	$2,040	$1,690	$350
Muswellbrook	Unit	$305,000	$1,510	$1,320	$190
Queanbeyan	Unit	$445,000	$2,100	$1,920	$180
Lavington	Unit	$272,000	$1,270	$1,180	$100
Grafton	Unit	$355,000	$1,610	$1,540	$70
Tweed Heads West	Unit	$462,000	$2,070	$2,000	$70
East Albury	Unit	$315,000	$1,420	$1,360	$60

Victoria

There are no suburbs in Greater Melbourne where a house investment is likely to deliver a positive gross cash flow, given the city’s high prices.

But there are a few areas where buying a unit to rent out could give landlords a decent monthly return.

Melbourne’s CBD comes out on top in the calculations, potentially bringing in $190 per month in gross returns.

“The inner-city Melbourne rental market was one of the hardest-hit in the early part of Covid,” Mr Moore said.

“Rents fell nearly a fifth during the pandemic, with vacancy rates exceeding 12% by the end of 2020. But that’s changed significantly in the past 12 months to 18 months and rental markets are now extremely tight.

“Vacancy rates are sitting at about 1.6% – well below what it was pre-pandemic, and even a little lower than the national average. As a result, advertised rents have rebounded and are now above where they were pre-pandemic.”

In regional Victoria, the agriculture town of Kerang in the state’s far north, near the border with NSW, houses could return $200 per month in gross terms.

Sale comes out on top for unit investment returns, with landlords potentially getting $180 per month gross.

The data

Source: PropTrack

Suburb	Type	Median price	Monthly median rent	Monthly mortgage repayments	Gross monthly return
Kerang	House	$272,000	$1,380	$1,180	$200
Echuca	House	$585,000	$2,680	$2,530	$150
Stawell	House	$358,000	$1,630	$1,550	$80
Red Cliffs	House	$325,000	$1,480	$1,410	$70
Horsham	House	$370,000	$1,660	$1,600	$60
Morwell	House	$330,000	$1,460	$1,430	$30
Benalla	House	$470,000	$2,060	$2,030	$20
Melbourne	Unit	$547,000	$2,560	$2,360	$190
Sale	Unit	$310,000	$1,520	$1,340	$180
Carlton	Unit	$480,000	$2,200	$2,080	$120
Morwell	Unit	$295,000	$1,340	$1,280	$70
Mooroopna	Unit	$260,000	$1,180	$1,120	$60
Mildura	Unit	$293,000	$1,320	$1,270	$50
West Melbourne	Unit	$522,000	$2,300	$2,260	$40
Wodonga	Unit	$332,000	$1,480	$1,440	$40
West Wodonga	Unit	$335,000	$1,480	$1,450	$30

Queensland

Walk in any direction from the centre of Brisbane’s CBD and you’re likely to quickly hit a sought-after hotspot.

There’s the picturesque Botanic Gardens to the east, bustling South Bank to the south, peaceful Roma Street Parklands to the west, and pumping Fortitude Valley to the north.

That proximity, as well as an explosion in the number of city centric hospitality venues, has put living in the thick of it on the agenda of many tenants.

According to the PropTrack data analysis, a would-be landlord with a unit investment could expect to generate about $370 per month gross.

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Local agent Kai Liu from Ray White Inner Brisbane Apartments said the CBD is an investor’s dream, with affordable purchase prices and strong rental returns on offer.

“There’s a lot going on – the new Queens Wharf Precinct, the popular revitalised Howard Smith Wharves, the established Queen Street Mall area, and the upcoming Cross River Rail infrastructure,” Mr Liu said.

“We are also seeing trends of all age demographics now living in the Brisbane CBD, whereas in the past it has typically been the younger demographic.”

During the Covid pandemic, investors fled the market in droves. Mr Liu has seen a recent resurgence in activity in the past year.

“We are now dealing with 60% investors, both from interstate and locally,” he said.

“Throughout the past year, I’ve sold several one-bedroom apartments without car parks to Sydney investors sight unseen. They rent for up to $650 per week, furnished.”

Outside of the hustle and bustle, investors who buy a unit in suburban Woodridge could bring in about $390 gross each month, the data analysis indicated.

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Local agent Teza Fruzande from Ray White Logan City said the suburb is in an exceptional location, about halfway between Brisbane and the Gold Coast.

“Woodridge has easy access to the highway, great public transport via two train stations and many bus services, and affordable property prices,” Mr Fruzande said.

“High rental demand means landlords can get some great rent returns, which attracts a lot of investor activity.”

And in the state’s regions, the Rockhampton suburb of Berserker could see investors pocket a whopping $600 per month gross from a house.

Local agent Wes Smuts from The Agency said a significant investment in flood mitigation has reduced risk in most of the suburb.

“The reasonable entry price point has encouraged a lot of first-time homebuyers, who’ve spent money on upgrading homes and cleaning up yards, leading to increase in street appeal,” Mr Smuts said.

Sharp growth in rental prices has attracted investors in search of strong yields and solid potential capital growth prospects.

“Interstate investyor and buyer’s agent interest remains strong, with a lot of interest in Berserker coming from those groups.”

The data

Source: PropTrack

Suburb	Type	Median price	Monthly median rent	Monthly mortgage repyaments	Gross monthly returns
Healy	House	$435,000	$2,750	$1,880	$870
Sunset	House	$285,000	$2,010	$1,230	$780
Soldiers Hill	House	$312,000	$2,120	$1,350	$770
Moranbah	House	$330,000	$2,200	$1,430	$770
Moura	House	$175,000	$1,470	$760	$720
Blackwater	House	$165,000	$1,320	$710	$610
Kawana	House	$345,000	$2,100	$1,490	$610
Berserker	House	$270,000	$1,770	$1,170	$600
Mount Morgan	House	$155,000	$1,260	$670	$590
Koongal	House	$298,000	$1,850	$1,290	$560
Laidley	House	$377,000	$1,800	$1,630	$170
Lowood	House	$409,000	$1,890	$1,770	$120
Russell Island	House	$335,000	$1,540	$1,450	$90
North Booval	House	$420,000	$1,890	$1,820	$70
Riverview	House	$392,000	$1,730	$1,700	$40
Leichhardt	House	$406,000	$1,770	$1,760	$10
Earlville	Unit	$305,000	$2,190	$1,320	$870
Cannonvale	Unit	$300,000	$2,110	$1,300	$810
Mooroobool	Unit	$265,000	$1,880	$1,150	$730
Woree	Unit	$195,000	$1,560	$840	$720
Idalia	Unit	$225,000	$1,690	$970	$710
Parramatta Park	Unit	$300,000	$1,970	$1,300	$670
Westcourt	Unit	$260,000	$1,790	$1,120	$670
Manoora	Unit	$226,000	$1,630	$980	$650
Manunda	Unit	$180,000	$1,430	$780	$650
Cairns North	Unit	$287,000	$1,890	$1,240	$650
Woodridge	Unit	$240,000	$1,420	$1,040	$390
Slacks Creek	Unit	$274,000	$1,560	$1,180	$380
Brisbane City	Unit	$480,000	$2,450	$2,080	$370
Logan Central	Unit	$215,000	$1,290	$930	$360
Eagleby	Unit	$324,000	$1,760	$1,400	$360
Mount Warren Park	Unit	$255,000	$1,450	$1,100	$350
Kingston	Unit	$295,000	$1,620	$1,280	$350
Waterford West	Unit	$250,000	$1,420	$1,080	$340
Spring Hill	Unit	$435,000	$2,220	$1,880	$340
Goodna	Unit	$279,000	$1,520	$1,210	$310

South Australia

A region that’s been truly tried and tested by investors it’s the Elizabeth pocket in Adelaide’s outer north.

And on the northern fringe of this cluster of suburbs is Elizabeth Downs, where about half of all sales are to landlords, local agent Mike Lao from Edge Realty said.

“Yields range from 5.5% to 6.5%, depending on what you’re talking about, and the rental vacancy rate is less than 1% currently,” Mr Lao said.

The PropTrack analysis indicates an investor with a house could stand to rake in $210 per month gross.

“The suburb borders on Craigmore and has a mixture of affordable detached and semi-detached homes on large allotments that are perfect for development, renovation or gentrification,” Mr Lao said.

The suburb of New Port in Port Adelaide could deliver unit investors about $260 per month gross, the data indicates.

Amelia Langhans from Toop+Toop said the area has become increasingly popular thanks to its waterfront location and proximity to the beach.

“It’s also surrounded by shops, restaurants, bars, and local breweries,” Ms Langhans said.

“It’s a good place to buy as it appeals to a large cross section of the community, and offers value for money with fantastic lifestyle amenities, marina berths, and positive returns for investors.”

Investor activity has been strong in recent times, particularly for units and townhouses, she said.

“Our new properties are leased within in the first week so there is very little vacancy.”

The data

Source: PropTrack

Suburb	Type	Median price	Monthly median rent	Monthly mortgage repayments	Gross monthly return
Smithfield Plains	House	$327,000	$1,660	$1,410	$250
Elizabeth Downs	House	$328,000	$1,630	$1,420	$210
Elizabeth North	House	$294,000	$1,470	$1,270	$200
Elizabeth Grove	House	$341,000	$1,650	$1,480	$180
Munno Para	House	$361,000	$1,720	$1,560	$160
Davoren Park	House	$315,000	$1,520	$1,360	$150
Andrews Farm	House	$390,000	$1,840	$1,690	$150
Salisbury North	House	$390,000	$1,830	$1,690	$150
Elizabeth South	House	$308,000	$1,460	$1,330	$130
Evanston	House	$383,000	$1,790	$1,660	$130
Salisbury	Unit	$330,000	$1,710	$1,430	$280
Walkerville	Unit	$372,000	$1,880	$1,610	$270
New Port	Unit	$320,000	$1,640	$1,380	$260
Kurralta Park	Unit	$354,000	$1,780	$1,530	$260
Mawson Lakes	Unit	$332,000	$1,680	$1,440	$250
Adelaide	Unit	$458,000	$2,210	$1,980	$230
Salisbury East	Unit	$316,000	$1,550	$1,370	$180
St Clair	Unit	$373,000	$1,790	$1,610	$180
Brooklyn Park	Unit	$322,000	$1,560	$1,390	$160
Camden Park	Unit	$354,000	$1,670	$1,530	$140

Australian Capital Territory

Combining a convenient location 12 minutes from the city, a plethora of high-profile schools, and a range of dwelling types, Bruce has grown in popularity in recent years.

And unit investors active in the area have the potential to bring in $170 per month gross.

Local agent Josh Yewdall said investor activity is often high thanks to the lure of schools for families as well as rental demand from workers at Calvary Hospital and the Australian Institute of Sport.

“The suburb has three main parts, being an older established area referred to as ‘Old Bruce’, with larger blocks and a beautiful bushland environment, and two newer parts to the centre of Belconnen,” Mr Yewdall said.

“The ‘New Bruce’ parts house a lot more of the townhouses and apartments, which gives the overall suburb a strong diversity of buyer and lifestyle types.”

Some new dining and retail precincts are popping up in the heart of suburb’s newer area, adding to its growth potential, he said.

The data

Source: PropTrack

Suburb	Type	Median price	Monthly Median Rent	Monthly mortgage repayments	Gross monthly return
Gungahlin	Unit	$455,000	$2,250	$1,970	$280
Wright	Unit	$525,000	$2,470	$2,270	$200
Phillip	Unit	$530,000	$2,470	$2,290	$180
Bruce	Unit	$484,000	$2,270	$2,090	$170
Franklin	Unit	$510,000	$2,340	$2,210	$140
Belconnen	Unit	$488,000	$2,250	$2,110	$130
Braddon	Unit	$569,000	$2,590	$2,460	$130
City	Unit	$610,000	$2,760	$2,640	$130
Reid	Unit	$525,000	$2,390	$2,270	$120
Greenway	Unit	$560,000	$2,540	$2,420	$110

Western Australia

At a national level, almost every result in the top 10 list for houses and units is in regional Western Australia – particularly mining-heavy regions.

In top spot is Baynton in the Karratha where an investor with a house stands to bring in $1990 per month gross.

Similarly, a landlord with a house in Port Hedland could expect a gross monthly return of about $1920.

The results are units are similar, with South Hedland topping the data results with a possible monthly return of $1590 gross.

But as Mr Moore pointed out, these areas come with a lot of risk.

There are suburbs within Greater Perth that appear on the state list, with Brookdale in the city’s outer southeast delivering an investor with a house $450 per week gross.

And a landlord with a unit in Orelia, a stone’s throw from beachside Rockingham, could expect $530 per month gross.

The data

Source: PropTrack

Suburb	Type	Median price	Monthly median rent	Monthly mortgage repayments	Gross monthly return
Baynton	House	$655,000	$4,820	$2,830	$1,990
Port Hedland	House	$725,000	$5,050	$3,130	$1,920
South Hedland	House	$385,000	$3,240	$1,660	$1,570
Newman	House	$330,000	$2,900	$1,430	$1,480
Nickol	House	$562,000	$3,880	$2,430	$1,450
Millars Well	House	$514,000	$3,580	$2,220	$1,360
Pegs Creek	House	$512,000	$3,450	$2,220	$1,230
Djugun	House	$650,000	$4,020	$2,810	$1,210
Bulgarra	House	$480,000	$3,210	$2,080	$1,130
Brookdale	House	$333,000	$1,890	$1,440	$450
Greenfields	House	$370,000	$2,020	$1,600	$420
Camillo	House	$331,000	$1,830	$1,430	$400
Medina	House	$320,000	$1,770	$1,380	$390
Parmelia	House	$350,000	$1,860	$1,510	$350
Leda	House	$380,000	$1,960	$1,640	$320
Hillman	House	$378,000	$1,950	$1,630	$320
Armadale	House	$312,000	$1,650	$1,350	$300
Orelia	House	$350,000	$1,820	$1,510	$300
Hilbert	House	$440,000	$2,200	$1,900	$300
South Hedland	Unit	$230,000	$2,580	$990	$1,590
Port Hedland	Unit	$385,000	$2,740	$1,660	$1,070
Bulgarra	Unit	$215,000	$1,880	$930	$950
Somerville	Unit	$284,000	$2,160	$1,230	$930
Broome	Unit	$365,000	$2,400	$1,580	$830
Cable Beach	Unit	$354,000	$2,300	$1,530	$770
Kalgoorlie	Unit	$217,000	$1,700	$940	$760
Orelia	Unit	$180,000	$1,310	$780	$530
Armadale	Unit	$272,000	$1,660	$1,180	$480
Ellenbrook	Unit	$310,000	$1,790	$1,340	$450
Thornlie	Unit	$298,000	$1,690	$1,290	$400
Queens Park	Unit	$380,000	$2,040	$1,640	$400
Balga	Unit	$315,000	$1,750	$1,360	$390
Kelmscott	Unit	$280,000	$1,590	$1,210	$380
Northbridge	Unit	$437,000	$2,270	$1,890	$380
Maddington	Unit	$305,000	$1,670	$1,320	$350
Osborne Park	Unit	$285,000	$1,580	$1,230	$350

Article source: Queensland Property Investor