Investor form guide wrap: Investor snaps up gross yield of 6.4% in Pyrmont

G7, 199 Pyrmont Street, Pyrmont, NSW, 2009

The tenants of this two-bedroom Pyrmont apartment are paying $730 per week and are on a lease until September this year. Within the Casino Gardens building, the apartment includes an internatl laundry, and the building has a swimming pool and gym. It is within easy walking distance of Darling Harbour and the CBD. The property sold to an investor on Friday, June 1, before its scheduled auction on June 2 for $590,000. This secured the investor a gross rental yield of 6.4%, significantly above the indicative gross rental yield for Pyrmont units of 5.1%, 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. Kho and Lee Property Group agent Sami Yildiz gave pre-sale price hopes in the "early $600,000s".

Washington Brown estimates the first-year tax depreciation deduction to be $12,000 and over five years to be $42,000.

The median unit price in Pyrmont fell by 4.3% in the past year, according to RP Data.

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

27 Main Road, Neerim South, VIC, 3831

An investor bought this three-bedroom house for $224,000 at its weekend auction. The current tenants are friends with the vendors and are paying significantly below-market rent of $170 per week. They are on a lease until December, but listing agent Pauline Soutar of Harcourts says market rent for the house would be about $250 or $260 per week. The house is on a large 1,115-square-metre block and is within walking distance of shops and transport.

The sale price reflects a gross rental yield of 4% at its current rental, or potentially 6% if it is later rented out for $260 per week. 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.

Soutar suggested pre-auction price hopes of $230,000 plus.  

Washington Brown estimates the first-year tax depreciation deduction to be $3,000 and over five years to be $6,000.

The median house price in Neerim South fell 11.5% in the past year, according to RP Data.

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

27 Grace Street, Cabramatta, NSW, 2166

In the popular Sydney suburb of Cabramatta, this three-bedroom house is on 658 square metres and is close to Cabramatta high school. The $400 a week lease has expired, but LJ Hooker agent Patrick Yeung says the tenant is keen to stay on and that $400 per week is market rent for the area. The property was passed in at an undisclosed price at its weekend auction

Yeung gave pre-auction price hopes of $380,000 plus, and if it sells for that price that would secure an investor a gross rental yield of 5.5%, well above the indicative gross rental yield of 4.1% for Cabramatta houses, 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.

Yeung recently sold a nearby property for $435,000 that was in much worse condition but in a better location than the Grace Street property. The tenants in that house paid $330 per week. The median asking rent for Cabramatta houses is $380 per week.

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

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