2014 was a year of change in the inner city Brisbane rental market.
A quick snapshot :
Council Rates: Always up
Body Corporate: Always up
Maintenance bills: Continual
Interest Rates: Better than ever
Rents are down as there is a lot on the market to choose from, developers offer rental guarantees to purchasers buying at seminars focussed on yields, flood the market with sub lease stock and the broader market suffers.
Rents are down as wages are flat and life is expensive.
Vacancy is up due to supply increasing,
Council rates and body corporate costs are always up and interest rates is a different discussion altogether.
I see so many peoples investment strategy based on yield rather than property value as the rental return enables us to fund the property purchase.
There is no point purchasing based purely on yields, rentals are not fixed, tenants are not likely to stay for life and buying purely to either solve a tax problem or achieve a set yield can distract an investor from the fundamental questions we should ask such as:
1: Why am I buying a property?
2: No seriously, why am I doing this?
3: Can I afford it?
4: Am I being told to buy or do I really want to do this?
5: Why does this property work for me?
6: Why would someone buy this from me when I am on the other side of the transaction?
Being clear about your investment strategy and looking at all elements not just yield is always a good idea.
Property is a long term play, it is about owning a location, not about reducing tax, think about what and why you are buying.