Leaving tenants and zero return

March 6, 2017

The impact of poor maintenance, poor facilities or noise can destroy the returns on a rental property.  With capital appreciation in city apartments set to stabilise or even decrease in some cities, this is more critical than ever.


The modern rental property is valued on a rental return of between 3.0% and 7.0% depending up on the market, the likelihood of capital gains in that location, and the market demand for property in that area.  The typical investor looks for something at 3.5% or above. According to the global property guide, Australian rental yields currently average 4.39% (based on resale apartments in premier city centres).


This is a Gross Yield (before rates, maintenance, insurance, and other costs).


Really, it is not a big number.


When you look at a rental property, 4.39% is the same rent that you receive in approximately 2.28 weeks.  So if your tenants stay on average for 12 months, and then you have 2 weeks vacant before new tenants move in, your gross returns are completely wiped out - and after costs, you are going backwards.






Before investing in a rental property, and as you manage that property, consider the factors that will drive away tenants and do what you can to minimise departures.

Share on Facebook
Share on Twitter
Share on LinkedIn
Please reload

Follow Us
  • LinkedIn Social Icon
  • Facebook Basic Square
  • Twitter Basic Square

September 9, 2019

Please reload

© 2019 NoiseNet Pty Ltd.  ABN 40 614 578 120 

  • Grey LinkedIn Icon
  • Grey Facebook Icon
  • Grey Twitter Icon