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Perfect time for landlords to ‘be greedy’

Perfect time for landlords to ‘be greedy’

by Jay Garcia 4 comments

The trend of falling rental yields could be just what property managers need to encourage clients to buy more investments.

A new report from CoreLogic RP Data notes that the national average for rental yields has fallen from 4.0 per cent in May 2014 to 3.7 per cent in May 2015 (see below), with declines in all capital cities except Hobart and Brisbane.

Investor’s Edge Real Estate director Jarrad Mahon told RPM that landlords should follow the advice of Warren Buffett: “Be greedy when others are fearful.”

Mr Mahon said: “I suggest to people to buy when they can; not when everyone else is telling you to.

“When everyone starts becoming fearful it’s the hardest time to act, but it’s when we actually should be buying as investors because we don’t have competition, we get our pick of properties and often at better prices.”

Mr Mahon said expanding a landlord’s portfolio means presenting the right information and options – and that every capital city offers a wide range of attractive suburbs.

“I would never suggest that someone buys something in the same suburb [as their existing properties]. Even within a city, you can get a lot of diversification,” he said.

“It’s about finding the areas that have got all the new infrastructure coming, rezoning changes coming, their popularity increasing, and they’re transitioning, changing and improving.”

Rental yield by capital city (May 2014 v May 2015)

  • Sydney fell from 4.0 per cent to 3.6 per cent
  • Melbourne fell from 3.6 per cent in to 3.3 per cent
  • Brisbane remained unchanged at 4.6 per cent
  • Adelaide fell from 4.3 per cent to 4.2 per cent
  • Perth fell from 4.3 per cent to 4.0 per cent
  • Hobart rose from 5.2 per cent to 5.4 per cent
  • Darwin fell from 5.8 per cent to 5.6 per cent
  • Canberra fell from 4.4 per cent to 4.2 per cent
Perfect time for landlords to ‘be greedy’
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