Rental hotspots for investors: The 10 best suburbs to buy investment houses

If you’re an investor, making an income off your rental property is important. But how do you know which suburb will give you the best yield? And should you invest in a house or a unit?

In the first of a two part series, we’re going to help make that decision a little easier by revealing the 10 Perth suburbs which produced the highest rental yield for houses in the year to April 2018.

So, what is a ‘rental yield’?

In real estate, the rental yield is the measure of how much rental income an asset is generating, as a percentage of the property’s value. The rental yield is useful for indicating the potential return of an investment property. A high yield means good annual returns for investors.

To put things into perspective, the rental yield for the Perth Metro region for houses currently sits at 3.6 per cent based on the overall median house rent price of $359 per week and median house price of $512,500. This means on average, a typical property investor can expect to generate a 3.6 per cent annual return on their house purchase price.

The 10 Perth suburbs with the highest house rental yields

1. Bullsbrook

Bullsbrook tops the list with a rental yield of 5.9 per cent. Investors can snatch up an affordable property in Bullsbrook with its median house price coming in at $320,000.

If you are considering investing in a house in Bullsbrook, the median weekly rent price tenants are paying is $360 a week.

2. Medina

Medina is next on the list with a rental yield of 5.4 per cent. Medina is the most affordable suburb on the list with a median house price of $240,000. Close to Kwinana train station, schools and shopping hubs, you can expect a median weekly rent price of $250 for an investment property in Kwinana.

3. Parmelia 

Situated 34 kilometres south of Perth CBD, Parmelia has a median house price of $267,000. With a rental yield of 5.3 per cent, investors in the area are receiving a median rent price of $270 per week.

Those looking to invest in Parmelia can expect a self-sufficient suburb close to schools, parks and the thriving Kwinana hub, making it an appealing choice for tenants with young families.

4. Armadale

Those looking to invest in a house in Armadale can expect a median rental return of $250 a week. The rental yield for the suburb is 5.2 per cent in the 12 months to April 2018. Located 25 kilometres southeast of Perth, Armadale’s median house price is $250,000, making it the second most affordable suburb to purchase a house in on the list.

5. Cooloongup

Next on the list is Cooloongup with a rental yield of 5.2 per cent. Situated 40 kilometres south of Perth bordering the coastal suburbs of Safety Bay and Rockingham, Cooloongup is a popular choice for families, and has a median house price of $282,500. If you are looking to invest in a house in Cooloongup, you can expect to receive a median rent price of $280 a week.

6. Maddington

Following closely behind is Maddington with a rental yield of 5.1 per cent. Maddington’s median rent price was recorded at $300 per week in the 12 months to April 2018.

Located 18 kilometres from Perth, Maddington contains major residential, retail and industrial sectors, as well as some semi-rural areas. Maddington’s median house price is $308,000.

7. Stratton 

Stratton has a rental yield of five per cent and a median weekly rent price of $320. This suburb is situated 19 kilometres from Perth, and is close to the Swan Valley and Jane Brook wine region. The median house price for Stratton is $334,000 and it takes on average 55 days to find a tenant.

8. Camillo

Camilo also has a rental yield of five per cent and has a median house price of $261,500. For those looking to invest in a house in Camillo, it currently takes around 62 days to lease a property and you can expect a median weekly rent price of $250. This suburb is situated 23 kilometres from the Perth CBD and provides a suburban lifestyle close to Araluen Botanic Park, making it a popular choice for families.

9. Warnbro

Warnbro comes in next with a rental yield of 4.9 per cent. Its median house price sits at $317,500 for the 12 months to April 2018.

Those who want to invest in this coastal suburb can expect a median rental return of $300 a week. Popular with families, Warnbro is an outer-southern suburb of Perth that is belongs to the City of Rockingham.

10. Merriwa

Merriwa rounds out the top 10, with investors receiving a median weekly rent of $298. Merriwa’s rental yield currently sits at 4.8 per cent and its median house price is $320,000. Merriwa is situated 36 kilometres out of Perth in the Shire of Wanneroo.

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