Rents Just Hit $705 a Week: Financing an Investment Property
If you’ve been thinking about buying an investment property, or you already own one, the latest rental figures are worth a proper look. According to Cotality’s Rental Review for the June quarter, national rents have climbed 5.9% over the past year, pushing the median weekly rent to $705.
Here’s the snapshot:
- Sydney rents now sit at $841 a week
- Perth has jumped to $784, and Brisbane to $734, both cities are closing the gap on Sydney fast
- The national vacancy rate is stuck at a tight 1.6%
- Rental listings are still 16.7% below the five-year average
- Gross rental yields have edged up to 3.7% nationally
Good news for landlords on paper. But as a broker, this is where we’d stop you before you get too excited.
Rising Rent Doesn’t Automatically Mean a Good Loan
We talk to a lot of investors who see numbers like these and assume the maths will simply work itself out. It usually doesn’t. Higher rent can improve your cash flow, but only if your loan is structured properly in the first place.
Before you buy, or before you refinance an existing investment loan, it’s worth working through a few things with your broker:
- What your rental income actually looks like against your current or proposed repayments. A rent rise in Perth or Brisbane doesn’t mean much if your loan repayments are set to jump too.
- Whether you’re better off with interest-only or principal and interest depends on what you’re trying to achieve.
- A buffer for the stuff that rent doesn’t cover, vacancies, repairs, rate changes, insurance. Tight vacancy rates are great until you’re the one with an empty property for a few weeks.
- Your true borrowing position, not just what a lender says you can borrow on paper.
Sydney, Perth, and Brisbane investors are all sitting in slightly different spots right now, so cash flow needs to be assessed city by city, not off a national average. What works in Brisbane on a $734 median rent won’t necessarily stack up the same way in Sydney at $841.
Our Take
Rents rising 5.9% a year is a headline. Whether it actually improves your position depends entirely on how your loan is set up. We’d rather you make that call with the full picture in front of you than guess based on a news article, including this one.
If you already hold an investment loan, this is also a good time to check whether it’s still working for you, especially with rental income shifting the way it has this year. We regularly help clients review their investment loan structures to make sure cash flow, not just borrowing power, is front and centre.
Want to know where you actually stand? OM Financials can walk you through your borrowing position, compare rental income against real repayment figures, and help you structure a loan around sustainable holding costs, not just today’s headline numbers. Book your free consultation or call us anytime on 0478 876 967. Do not forget to follow us on Instagram and LinkedIn.