Investor form guide wrap: Gross rental yield of up to 5% in Cremorne

In The Links building in Cremorne, this two-bedroom unit is currently leased until November 2012 at $500 per week. Listing agent Fran Turner of Croll Real Estate says the tenants have been in place for 12 years and are playing significantly below market rent. She says a rental analysis of the property indicates it could be rented out for between $650 and $680 per week. It features views over Willoughby Bay and the surrounding district, laundry and 103 square metres of living space.

The property was passed in on a vendor bid of $680,000 at its weekend auction, and it is now for sale for $705,000. There was one registered bidder, and no bids at the auction. Before auction Turner was marketing the property with price hopes of $730,000 plus.  If it sells for $705,000, its current rent would secure an investor a gross rental yield of 3.7%, below the indicative gross rental yield for Cremorne units of 4.2%, according to RP Data. A rental of $680 per week would equate to a gross rental yield of 5%. 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. Levies are $1,340 per quarter, council rates are $187 per quarter and water rates are $142 per quarter.

The median unit price for Cremorne rose by 5.6% in the past year, according to RP Data.

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