Investor Form Guide Wrap: Potential rental yield of 6.1% in Potts Point

56/12 Wylde Street, Potts Point, NSW, 2011

This one-bedroom apartment with harbour views has the potential to rent for $585 per week, according to Ray White Elizabeth Bay agents Nick Harrington and Mike Cotton-Stapleton, who marketed the property. The 54-square-metre apartment on the fourth floor includes a balcony and an internal laundry. It sold at auction on Thursday, February 16 for $502,000. If it is rented out at $585 per week, that would secure a gross rental yield of 6.1%, higher than the indicative gross rental yield for Potts Point units of 5.3%, according to RP Data. The gross rental yield does not consider the costs of maintaining the property, including council rates and other fees such as water bills and managing agent fees. The Strata levies for this property are $823 per quarter, the water levies are $144 per quarter and the coucnil rates are $188 per quarter. 

Cotton-Stapleton and Harrington provided details of comparable sales, including the apartment at 16/4 Macleay Street, Potts Point, which sold for $500,000 in December 2011, and the apartment at 8/108 Victoria Street, Potts Point, which sold for $540,000 in September 2011. 

Washington Brown estimates the first-year tax depreciation deduction to be $4,000 and over five years to be $10,000 for the Wylde Street property.

The median price for Potts Point units went up 10.5% in the past year, according to RP Data.

For more information about yields and prices in Potts Points, see the RP Data suburb page.

518 Smithfield Road, Prairiewood, NSW, 2176

The tenants of this three-bedroom Prairiewood house are paying $1,600 per month and are on an expired lease. The property sold at auction on Thursday, February 16 for $483,000, and there were three bidders. It would secure an investors a gross rental yield of 4%, below the indicative gross rental yield for Prairiewood houses of 5%, according to RP Data. The gross rental yield does not consider the costs of maintaining the property, including council rates and other fees such as water bills and managing agent fees. Before auction Ray White listing agent Graham Ball was marketing it with price hopes of $450,000 plus, and he does not know whether the buyer is an investor.  Washington Brown estimates the first-year tax depreciation deduction to be $3,000 and over five years to be $6,000. The property is on a large block of 1,248 square metres and is close to schools and transport.

For more information about yields and prices in Prairiewood, see the RP Data suburb page.