Investors looking to grow yield in addition to capital growth: Buyer’s agent

Diane LeowDecember 7, 2020

Property investors now place a greater emphasis on rental yield in addition to capital growth, according to buyer’s agent Rich Harvey.

Harvey, who is the managing director of independent buyer’s agent propertybuyer.com.au, says he has been seeing investors looking to improve their yield on their investment.

“We do it by adding a granny-flat to a property,” he said.

Property Observer recently reported that granny-flats are worse investments than vending machines. Harvey feels this claim is a generalisation.

“It depends on how you do it and the area – not all areas will suit a granny-flat,” he said.

He added that it would not make sense to build a granny-flat on a high value property in areas like Double Bay, but in areas where the price point is relative to rental, an additional granny-flat could enhance a property’s value.

“For example, we are getting excellent yield in Western Sydney. A one-bedroom costs $80,000, with a rental return of $230 per week. A two-bedroom costs $100,000, with a rental return of $290 per week.”

“The total yield with an existing home would be around 8.5%. That’s positive cash flow, and a total return of $8000 to $10,000 per year. There’s also the added benefit of capital growth on the property,” he said.

Diane Leow

Diane has spent her entire career in the world of digital. She is passionate about delivering the best content to a world that is becoming increasingly jaded by the news. She also believes in the importance of great journalism and how it can change the world. Oh, she also drinks a lot of coffee.

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