One Way to Achieve a Higher Rental Yield From Blue Chip Property

One Way to Achieve a Higher Rental Yield From Blue Chip Property - WDYTC EP126

What Do You Think, Chris? – Episode 126

10/30 Eaton Street, Neutral Bay, NSW 2089

We purchased for a client

$720k

Rent circa $500 per week unrenovated or $550 per week renovated = 3.6 – 4%

https://www.realestate.com.au/sold/property-unit-nsw-neutral+bay-139328295

PROS
– Nice location close to harbour, shops, cafes, transport
– Balcony off living area
– Bathroom not off bedroom
– Decent sized bedroom with built in
– Lock Up garage
– Potential to add value through renovation
– Small block of only 15 units
– High demand from a rental perspective
– Leafy outlook from balcony
– Not many 1 bed units in blue chip areas you can buy for $720k that are still a decent size

CONS
– Shared laundry (however if renovate can probably find a spot for it internally)

Investing in real estate can be a lucrative venture, providing both passive income and long-term wealth accumulation. This week, we’ll delve into the strategies and considerations for acquiring investment properties, drawing insights from a recent property analysis in Sydney’s Neutral Bay.

Understanding Property Investment

Property investment involves purchasing real estate with the intent of generating income or realizing capital appreciation. Investors often seek properties that offer a balance between rental yield and potential for growth. Location, property condition, rental demand, and market trends are critical factors to consider when evaluating investment opportunities.

Analyzing a Property: Case Study

In a recent analysis of a property located at 1030 Eton St, Neutral Bay, our team identified promising investment potential. Purchased for $720,000, the property offers a rental income of approximately $500 per week, with the possibility of increasing to $550 per week post-renovation. This translates to a rental yield of 3.6% to 4%, outperforming the average rental yield in Sydney.

Factors Influencing Rental Yield

Several factors influence rental yield, including property price, rental income, and ongoing expenses. Cheaper properties often yield higher rental returns, while premium properties may offer potential for capital growth. Additionally, factors such as location amenities, property condition, and market demand play a significant role in determining rental income and overall investment performance.

Key Features of the Property

The property in question boasts several attractive features conducive to rental success. Its prime location in Neutral Bay, proximity to amenities, and leafy outlook contribute to its appeal. The layout, including balconies off the living area and well-appointed bedrooms with built-in robes, enhances livability and tenant satisfaction. Furthermore, the inclusion of a lock-up garage adds convenience and value to the property.

Addressing Property Drawbacks

While the property exhibits numerous strengths, it’s essential to acknowledge potential drawbacks. Shared laundry facilities and outdated interior fixtures may detract from its appeal. However, these shortcomings present opportunities for improvement through renovation and modernization, thereby enhancing rental potential and property value.

Where to From Here?

If you’d like to talk about buying your next property, or have found something and aren’t sure if it’s a perfect fit, then reach out and book a time to chat. We’re happy to answer any questions you have.

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