The technique of rentvesting has become increasingly popular with property investors around the country. Now new research from LocationScore.com.au shows the suburbs where renters are paying less than homeowners for the same lifestyle.
The property research site has identified the top suburbs around the country where renters are paying less than owners to enjoy the same top-notch lifestyle.
In NSW it was the premium beach-side suburbs that sat on the top of the list, with Tamarama and Seaforth listed as the top two locations where renters were getting a better deal thanks to low yields and high property prices.
“Tamarama is an iconic waterfront location in Sydney, but with a unit buy-in price of around $1.4 million it remains out of reach for many purchasers,” said Director of Research Jeremy Sheppard.
“Yet for around $500 per week in rent, a couple can enjoy all the beachfront benefits of a one-bedroom unit in this suburb, and still come out ahead by investing elsewhere.”
Renters in NSW would do better to spend their coin in suburbs like Wallacia and Jamisontown, which came out on top of locations to invest in, according to LocationScore.com.au, with a 4.45 and 4.3 per cent median yield respectively.
In Victoria, it was McKinnon and Brighton East that topped the list of suburbs where renters are doing better than homeowners.
“With units only providing just over three per cent gross return, tenants are definitely coming out ahead of owners,” said Mr Sheppard.
Investors should be turning to high-yielding suburbs Milgrove (4.86 per cent) and Melton West (4.88 per cent), which both have median prices under $350,000.
Despite Sydney and Melbourne coming in with the highest house prices, there were still suburbs in other states where renters are king.
In Brisbane it was Woolloongabba that topped the list, Adelaide offered St Clair and in Perth Highgate was the suburb where it pays to rent.
Rochedale South in Brisbane, Happy Valley in Adelaide and Bibra Lake in Perth were on the other end of the spectrum, with rental yields well over five per cent, making them prime locations for investors.
“Rentvestors are a new breed of investor who are using the power of yield and growth to their advantage by ensuring they make the most of every single dollar,” Mr Sheppard said.
“Out of the thousands of property markets Australia-wide, what are the chances that where you live is the best place to invest in property right now? Highly unlikely!
“Smart rentvestors are renting for lifestyle and investing for growth to beat homeowners in the financial stakes,” he said.
More data here courtesy of locationscore.com.auDownload Tables