How to Maximise Your Rental Yield in the Townsville Market

Townsville’s potential for real estate investment is well-recognised within investor circles across Australia. Year-on-year house price growth over the past 5 years, a critical undersupply of new homes, and future infrastructure expansion plans in the Townsville region are just some of the reasons investors are looking at regional Queensland’s fastest-growing market.

While there’s no denying the potential returns, the positioning of a real estate investment will significantly impact the value it delivers. To get the most out of an investment, owner-investors must understand how to maximise its rental yield according to the local market factors.

Understanding Rental Yield

Rental yield is a measure of the rental income investors earn as a percentage of the purchase price.

A property purchased at $560,000 that is now earning $550 in weekly rent has a gross rental yield of 5.12%. After factoring in ongoing costs such as maintenance and property management fees, the net rental yield will typically be lower.

Investors can compare the net rental yield with similar properties in the same locality to find out whether the property’s investment potential is being maximised. More often than not, this comparison is undertaken by a property management company with an in-depth understanding of the local market, like Townsville Rentals. 

Tips for Maximising Rental Yield in Townsville

1. Get A Rental Appraisal

Obtaining a rental appraisal should be the first step in determining the rental potential of a property. Our property management team analyses the current market conditions and evaluates similar properties in the area to arrive at a competitive rental rate.

Rental appraisals are ideal for new investment properties and properties that have not had a rent adjustment in the past 12 months. Townsville Rentals offers free rental appraisals for property owners - if you are unsure how much your investment property can achieve in rental returns, we can help.

2. Know Your Market

Each property type caters to different tenants - young families tend to favour houses, while students and single professionals are more likely to seek apartments. The key thing to remember is that these tenants have different expectations for rent - a family with two working parents will have greater financial ability to afford higher rent. 

This is important when marketing the property and sourcing potential tenants - you’ll want to make sure that your ideal tenant can reliably meet your expected rental income.

3. Adjust Rent Around Market Seasonality

The demand for rental accommodation in Townsville fluctuates based on seasonal factors like the new defence force postings to the local military base, Lavarack Barracks, and the enrollment period for universities like CQUniversity and James Cook University.

Townsville is home to one of Australia’s most extensive military hubs and is the nation’s largest garrison city. Military personnel posted to Townsville arrive in staggered waves throughout the year - properties close to Lavarack Barracks often experience surges in demand as army personnel look for accommodation for their families.

Similarly, students of CQUniversity and James Cook University often look for accommodation from January to February, and in June to July. Properties offering student accommodation often experience a surge in demand that investors can capitalise on.

4. Minimise Ownership and Maintenance Costs

Owner-investors should monitor the ongoing costs of the property to identify opportunities to maximise rental yield. Repairs and maintenance are part and parcel of the property owner’s responsibilities, but high costs and frequent work can significantly impact rental earnings.

Property management services can connect owners with cost-effective solutions for required repairs to keep costs low and maximise rental income.

5. Balance Rent with Tenant Retention

It may be tempting to continually increase rent every 12 months to obtain a higher rental yield. Raise the rent too high, however, and existing tenants may choose not to renew the lease, putting the investment at risk of long-term vacancy.

Focus on maintaining a balance between an acceptable rental rate and consistent occupancy. Keeping a reliable tenant that pays rent on time and maintains the property in good condition ensures more stable rental income in the long term.

Working with an experienced property management company like Townsville Rentals simplifies the process of maximising your investment’s rental yield. We have a track record of servicing both property investors in Townsville to achieve effective rental returns. Get in touch with our team - we can provide you with a free rental appraisal.