Just like you can receive dividends from owning stocks, rental income is the main form of income from owning an investment property.
A property’s rental yield is calculated by dividing annual rental income by the property value and multiplying by 100.
This means that, for example, if you own a property that is rented out for $300 per week, giving a total of $15,600 a year, and the property price is $300,000, then the rental yield is 5.2%.
Across Australia's capital cities, the average rental yield in Adelaide is above Sydney, Melbourne and Perth, and equal with Brisbane.
However, the chart above doesn't show the trends lately. The rental yield in Adelaide has been remarkably stable at well above 4% while the yield in Brisbane is now slipping backwards.
So, which suburbs in Adelaide offer the best rental yields? We've outlined them below and they might come as a surprise!
A common feature among the suburbs listed above is that they all have low median house prices (average median price of $320,000) when compared to the state average of $450,000. It shows that bargains can be found on the outskirts of the city where rent has increased at a faster pace than house prices in recent years.
For more information on how you can start investing in property in Adelaide, contact Shayne at firstname.lastname@example.org or call 1300 944 039.