This week we look at two suburbs in Queensland that are posting huge rental yields and one of them is experiencing huge capital growth as well. And we speak with Richard Halabi co-founder of Guardian Property Services, who talks to us about the importance of marrying the needs of the investor to the appropriate property. And in this weeks tax tip we look at what property investors will need to start thinking about as the end of the financial year rolls over.
Figures released by the Real Estate Institute of NSW show that rental vacancies fell further in May.Sydney’s vacancy rate tumbled from 1.5 per cent in April to 1 per cent in May, its lowest level in 12 months. In a report in the Brisbane Times Real Estate Institute of NSW President Steve Martin says first home owner grants and record low interest rates had not boosted rental vacancies. And in other news, home buyers in Queensland received good news in the states budget with the announcement that the threshold for stamp duty on vacant land is to be nearly doubled. This Treasurer Andrew Fraser says will save first home buyers up to $5,675 on vacant land bought. The budget also detailed a record $18.2 billion capital works project for 2009/2010.
This week we are looking at the property markets of two Queensland suburbs that are both posting excellent rental yields. We are firstly looking at the housing market in Moranbah which is located about 200 kilometres south-west of Mackay in far north Queensland which is also experiencing huge capital growth, driven by the coal industry in the area. Then we take a look at a less remote suburb - Benowa which is located on the Gold Coast in south eastern Queensland and see how units are offering very solid rental yields. Let’s have a look at the numbers….. 60% of Moranbah’s dwellings contain married couples and families. 92% of the population is born in Australia. Stand alone houses account for 86% of dwellings in this area and rental properties make up a large 49% of the housing market. The median house price in Moranbah is $420,000 dollars, which is a gain of almost 20% compared to a year ago. The average growth rate over the last 5 years is 27% each year while over a ten year period it is almost 30% per annum. Houses are taking about 87 days to sell but when they do they are selling for only a 4.9% discount to listing price. The weekly asking rent price is $850, which is an increase of almost 42% compared to a year earlier, bringing the gross rental yield to 10.5%. Now let’s have a look at the unit market in Benowa….. Less than half of Benowa’s dwellings contain married couples and families. 66% of the population is Australian born. Units and apartments account for 57% of dwellings in this area and rental properties make up 40% of the housing market. The median unit price in Benowa is $325,000 dollars, which is 3% less compared to a year ago. The average growth rate over the last 5 years is -1.6% each year while over a ten year period it is 8.4% per annum so clearly growth has stalled in the last few years. The weekly asking rent price is $657.50, bringing the gross rental yield to 10.5%.
As the financial year rolls over, we thought we would focus on some things that will help you and your accountant, get ready to submit your tax return. Individual property investors generally use cash accounting to account for your income and expenses. Cash accounting simply means that you account for revenue and outgoings when you pay for them, not necessarily in the period that they relate to. So if rent for the month of July hit your bank account at the end of June, then you need to account for this revenue in June - even though it is the July rent. Similarly, if you pay for expenses in July that relate to June - the invoice could even be dated June - you need to account for it in the month that you actually pay it, which is why there is always a rush to pay for expenses in June. It is also time to start collecting the following documents ready for tax time. Property investors all generally need: an annual statement from your real estate agent showing total rent received and any repairs and agent fees, a depreciation schedule, the total interest paid on any loan, council and water rates, travel expense details, insurances and any other property related expenses. Having a tidy list of these things can significantly reduce the time that your accountant has to spend going through it. And of course, find a good accountant or tax professional to assist you to make the right decisions this year - it could save you thousands of dollars.
