Investor form guide wrap: Yields of 5.2% in Merrylands

8 Henderson Street, Merrylands, NSW, 2160

Within walking distance to shops, this two-bedroom house sold at auction for $425,000 to an investor. There were five registered bidders. The tenants have been in residence for 15 years and are paying $425 a week. Laing + Simmons selling agent Jas Singh says it could potentially fetch $10 or $15 more a week but that the vendor was happy to have a stable tenant rather than insist upon market rent. The weatherboard cottage on 525 square metres has high ceilings, a garage and a small study.

Singh gave pre-auction price hopes in the "early to  mid-$400,000s". At its current rent it will secure its buyer a gross rental yield of 5.2%, above the median gross rental yield for Merrylands houses of4.6%, 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.

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 Merrylands rose 1.1% in the past year and rose 24.7% in the past five years, according to RP Data.

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