Smaller dual occupancy style dwellings achieving good rental returns in the Southern Highlands: HTW

Some investors have sought to move money away from the major capitals and into regional areas, according to a recent Herron Todd White (HTW) residential report. 

The valuation firm took a look at rental yields across the nation. 

The report noted the Southern Highlands has remained relatively popular due to its good proximity to Sydney while still being relatively affordable in selected areas close to the main local townships of Bowral, Mittagong and Moss Vale.

"For example, a basic 1990s three to four bedroom project home in East Bowral can be purchased for between $650,000 and $750,000 in the present market and we are seeing rental returns on these in the mid to high $500 per week range," the valuation firm said. 

Brand new project homes in Renwick and Braemar are a similar range with a slightly higher rental return.

These properties are generally achieving good rental returns as they have lower vacancy rates due to good proximity to the highway and central shopping hubs.

Overall the Southern Highlands would most likely be considered to have good rental yields but nothing exceptional due to also typically benefiting from reasonable capital growth, again off the back of its good proximity to Sydney.

"As far as the best rental yields go, we are mostly seeing these come from properties that have multiple areas of occupancy, whether that be semi- detached duplex or apartment style properties which are seeing yields in the high 5% to 6% region.

"This is mostly due to the lowest rental available in the Highlands region being around the $350 to $400 per week range, so these smaller (two to three bedroom) dual occupancy style dwellings are achieving good rental returns," the valuation firm said.