With Geelong's house prices shooting up almost 80 per cent in the last decade, according to a CoreLogic report, the interest in real estate here has sky rocketed alongside it. And despite how Melbourne, so close by, has seen the property market plateauing, the same can't be said for Geelong. What does this mean for rental property investments?
Only a couple of months ago, we discussed the top five suburbs for investment properties. Now we're back to discuss rental property returns, and which locations you should focus on for the most promising results.
The general market
With rental demand high throughout almost all the region, it's unlikely that you'll have to worry about a rental property sitting empty for long. In Geelong it's the units that are front and centre when it comes to gaining decent rental returns, but this doesn't mean houses should be ignored. Possible future returns in capital gains should be considered before any decisions are made.
Bordering centre city, East Geelong is showing excellent results when it comes to rental units. Offering a yield of 4.5 per cent, and an estimate cash flow of $144 per month, the results aren't the only thing that make this suburb so appealing.
Home to the Geelong Botanic Gardens, a range of excellent spots to get your coffee fix, and enough specialty boutiques for even the most avid fans, East Geelong is a beautiful area with waterfront access. And, after Geelong West, it's showing the most annual growth as well.
St Alban's Park
This quiet suburb was once visited by Phar Lap, back before his incredible 1930 Melbourne Cup victory. However, this isn't what makes St Alban's Park a place to watch when it comes to rental property investments.
Chasing on Whittington's tail with a rental yield of 4.4 per cent for houses, and a positive estimated cash flow of $129 per month, St Alban's Park is producing strong results. Though annual growth sits at a lower rate of 5.8 per cent, the houses for sale here have the added benefit that they rarely need renovations. Adding your own touches to these homes is all that is required.
For units, the rental yield is 4.7 per cent, with $182 per month as the estimated cash flow produced.
Though Grovedale's rental yield for homes is slightly lower at 4.1 per cent, its true strength shines through in units. Topping St Alban's Park with a rating of 4.8 per cent, and an estimated cash flow of $209 per month, it also is a great location.
Two train stations, four primary schools, and a secondary college all in the district makes Grovedale a great place for families to settle. It has access to the Surf Coast, which creates appeal for potential residents, and Deakin University is close enough by that students can consider it an option too.
Combined with a low entry point for prices, it's one of the better areas in Geelong for rental returns.
Whatever you are looking for, whether it's a primary residence or an investment opportunity, Geelong can provide it. However, with entering the property market comes a lot of different elements to think about, from tax implications and property managers, to maximising profit.
Here at WMC Accounting, we make it our job to help property investors create a bright and prosperous future. Let us support you in making the most of Geelong's rental market.