When you’re considering investing in a property, one of the key aspects you want to decide is where. Where should you invest to ensure you are getting the best rental return on your property?
This is where country versus city comes into play. While the city has a number of positives, such as higher business confidence, more diverse major infrastructure, better opportunities for employment and larger salaries, if you do your research and choose the right destination, you will actually find that regional Australia offers its own unique benefits.
Statistics state that 6.45 million people live outside of Australia’s largest urban centres. That’s a lot of people who need homes and many of them don’t have the option of buying themselves.
If you are considering investing in the country, mining towns are a fantastic option and in fact, many mining towns are beating capital cities when it comes to investment opportunities.
Regional towns are often much cheaper when it comes to buying and the median house price in some towns is well under $150,000. The returns are often higher – regularly hitting well over 20%. Earlier this year, studies found that despite the downturn in the mining sector, properties in Mt Isa and Mackay in Queensland were still achieving total returns of 22.5% and 20.3% respectively.
And again, in places like Mt Isa, vacancy rates are extremely low and new homes rent for up to $800 a week, while smaller homes can be rented for around $400 a week. Because mining towns are usually occupied by fly-in fly-out workers, renting is often the preferred option for workers. With limited choice available in many of these towns it’s often possible for investors to ask for higher rents.
If you’re looking to invest in regional Australia, make sure you do your research first. Find out what the population growth has been like in recent years and if there is a continued trend. See if there are any new major developments listed on council websites that might attract more people to the region. You should also check the local tenancy authority website (such as the RTA in Queensland) for median property prices in the past few years, to see if they are on the rise.
As long as you do your research first and make well-informed choices, you are likely to benefit greatly from regional investment.