The best suburbs to yield a good investment in Townsville

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This unit on Yates Street in Nelly Bay, sold in October last year for the suburbs median sale price of $175,000.

CORELOGIC has revealed the Townsville suburbs with the highest rental yields — and it’s worth taking a look if you’re on the market for an investment property.

The figures indicate the gross median for 2018, and are calculated based on the annualised median asking rent, divided by the median sale price.

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REIQ regional director Damien Keyes said while rental return is not the only way to make a profit from property investing, it is worth investors taking it into consideration when buying.

“Rental yields always come into it, people want to make sure their capital is earning a dollar … They should also look at vacancy rates, where the biggest pool of potential tenants are going to come from, the age, condition, style of property, and also the potential for future capital gain,” Mr Keyes said.

Damien Keyes, Keyes & CO Property. Picture: Shae Beplate.

“Residentially anywhere around 5.5 and 7.5 per cent is a good gross rental yield, and there are a number of suburbs in Townsville that provide that.”

Units in the region returned the best rates, with the top four rental yield suburbs reflecting returns on these property types.

Nelly Bay yielded a staggering ten per cent, which is almost double the median average for Northern Queensland.

Units in the suburb are selling for an average of $175,000, and being rented for $335 a week, making them a lucrative asset for investors.

This one-bedroom unit on Yates Street in Nelly Bay, sold in October last year for the suburbs median sale price of $175,000. Before that it was tenanted at $250 per week. Image: Supplied

Damien Keyes said the suburb’s high rental yield rate was likely a result of the areas strong rental demand.

“Nelly Bay is where the ferry docks, and it’s where the terminal is — so I guess there’s a lot of short term accommodation sprinkled around that area … I’d suggest that would be behind it.”

Belgian garden’s also had a high rental yield of 8.5 per cent last year, which is also well above the North Queenland median of 5.5 per cent for units.

Garbutt was the third highest, returning 8.2 per cent, followed by Hermit Park with 7.2 per cent for units.

Rasmussen was the next best suburb, which had the highest rental yield for houses in Townsville — it is also the cheapest suburb to buy a house in.

Houses in Castle Hill were surprisingly doing the most poorly, with an average gross rental yield of only 3.10 per cent for last year.

“The price point to buy in that area is quite high,” Mr Keyes said.

“Houses on the hill are normally a million plus — so they’re not going to be returning as much, but investors will make a lot more capital.”

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