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Market Wrap

Investors tapping into low interest rates for higher rent returns

(header 81 Little Page Street, Albert Park)

Low interest rates make for good rent returns

While interest rates remain at record lows, savvy investors are finding that now is the perfect opportunity to get as much as a 30 per cent return on investment for upgrading rental properties. One area where this approach could benefit the most is in sought after suburbs where the rental property is in need of an upgrade.

What the numbers say?

“An old house in original condition, and very run-down, yet in a blue-chip suburb will hold a lot of value in the land, however the rent return can be as low as 1 or 2 per cent, which for an astute investor doesn’t make sense,” shares hockingstuart Leasing and Business Development Manager Loic Mamet. One solution that we’re seeing happening more in the current economic climate is that property owners with rundown rentals are investing a modest amount on simple, aesthetic renovations and it’s resulting in some impressive results. “Investing $40 – $50k in a renovation could give property owners an extra $10 – $15k per annum in rental return,” adds Mamet.

If you feel that your property is receiving below market rent, speak to your property manager or a property expert to see if there are small changes you can make to ensure it’s performing to its best potential.