Where To Find Positive Cashflow Properties In Australia In 2023
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28 Feb, 2023
Updated: 01 Aug, 2024
Investing in positive-cashflow properties is a good strategy for building long-term wealth. These properties can generate a steady source of passive income that will help you achieve your financial goals. It also provides a hedge in case of unexpected expenses or job loss. But where can you find such properties in this year’s difficult economy and how can you identify them? Different factors determine a property’s level of rental income, such as market conditions, location, vacancy rates and more. Let’s find out what a positive-cashflow property is and where to find them across Australia.
What Is A Positive-Cashflow Property?
A positive cashflow property is one that generates a rental income greater than the expenses related to owning and operating the property, including depreciation and tax deductions, annually. The expenses include mortgage repayments, property taxes, maintenance costs, insurance, and any other costs that come from owning the property.
Investors must research carefully and apply due diligence to determine a property’s chances of generating positive cashflow before purchasing. Our investment property calculator can help.
Opportunity For Investors
A mass exodus of investors during COVID-19, and declining rental housing supply amidst rising tenant demand, have sparked a rental crunch in most of Australia, driving up rents in many areas. Combined with falling prices on homes, this means rental yields (rent as a percentage of the cost of the property) are on the rise, making for good prospective returns on real estate. This situation is attracting property investors back to the market.
Which Locations in Australia Have the Best Positive Cashflow Properties?
After comparing median house prices, average mortgage repayments and median monthly rent, PropTrack’s latest data shows several areas across Australia with positive gross monthly returns – median monthly rent minus the median monthly mortgage repayment – and, therefore, potentially positive cashflow properties. Let’s take a look at where to find them in various states and the ACT.
Note: Since gross monthly return doesn’t factor in ongoing expenses, like strata fees, maintenance council rates, taxes and other costs of ownership, it’s essential to get accurate estimates of these costs to make an informed decision about whether a property can offer positive cashflow.
New South Wales
Sydney, the nation’s largest city, still has high property values and positive-cashflow properties are hard to find there as of early 2023, but there are opportunities in regional areas of the state.
Many properties in the mining town of Broken Hill, for example, may deliver positive cashflow, as the average gross monthly return in the town is $600. Broken Hill is in far West NSW yet has a sense of community. And the Menindee Lakes are only an hour away, allowing people to go camping, fishing or play water sports.
Credit:realestate.com.au
Here are some other towns in NSW that currently have good prospects for properties that can deliver positive cashflow in the years ahead.
| Suburb | Type | Median Price | Median Monthly Rent | Monthly Mortgage Repayments | Gross Montly Return |
|---|---|---|---|---|---|
| Broken Hill | House | $175,000 | $1,360 | $760 | $600 |
| Moree | House | $252,000 | $1,690 | $1,090 | $600 |
| Cobar | House | $175,000 | $1,230 | $760 | $470 |
| Boggabri | House | $287,000 | $1,660 | $1,240 | $420 |
| Crestwood | Unit | $334,000 | $1,860 | $1,440 | $420 |
| Queanbeyan East | Unit | $390,000 | $2,040 | $1,690 | $1690 |
| Muswellbrook | Unit | $305,000 | $1,510 | $1,320 | $190 |
Victoria
If you are considering buying a property in Greater Melbourne, it is probably better to search for potential growth in value rather than cashflow. As with Sydney, it is hard to find areas in Melbourne with strong prospects for positive cashflow in 2023, given the high prices in the area. However, units in a few areas might give a homeowner a decent monthly return.
In the agricultural town of Kerang, near the NSW border, landlords could get a monthly gross return of $200 on a house priced at $272,000.
Credit: realestate.com.au
Meanwhile, units in Melbourne’s CBD can earn a monthly gross return of $190 on a price of $547,000. Sale, a coastal area in southeastern Victoria, gives better returns than units in the CBD of Melbourne. Landlords who invest in units in Sale can expect a monthly return of $180 on a unit priced at $310,000.
PropTrack economist Angus Moore noted that the rental market in the city has rebounded, to some extent, from the lows of COVID.
Here are some of the locations with many potential positive cashflow properties.
| Suburb | Type | Median Price | Median Monthly Rent | Monthly Mortgage Repayments | Gross Montly Return |
|---|---|---|---|---|---|
| Kerang | House | $272,000 | $1,380 | $1,180 | $200 |
| Echuca | House | $585,000 | $2,680 | $2,530 | $150 |
| Stawell | House | $358,000 | $1,630 | $1,550 | $80 |
| Melbourne | Unit | $547,000 | $2,560 | $2,360 | $190 |
| Sale | Unit | $310,000 | $1,520 | $1,340 | $180 |
| Carlton | Unit | $480,000 | $2,200 | $2,080 | $120 |
Queensland
Brisbane, the most populous city in Queensland, has scenic Botanic Gardens, bustling South Bank, Fortitude Valley and the Roma Street Parklands. The city is popular among tenants, and a homeowner who invests in Brisbane CBD units can expect to generate a gross monthly return of $370, PropTrack estimates. Here are some other locales in the state with good prospects.
| Suburb | Type | Median Price | Median Monthly Rent | Monthly Mortgage Repayments | Gross Montly Return |
|---|---|---|---|---|---|
| Healy | House | $435,000 | $2,750 | $1,880 | $870 |
| Sunset | House | $285,000 | $2,010 | $1,230 | $780 |
| Soldiers Hill | House | $312,000 | $2,120 | $1,350 | $780 |
| Moranbah | Unit | $330,000 | $2,200 | $1,430 | $770 |
| Earlville | Unit | $305,000 | $2,190 | $1,320 | $870 |
| Cannonvale | Unit | $300,000 | $2,110 | $1,300 | $810 |
| Mooroobool | Unit | $265,000 | $1,880 | $1,150 | $730 |
| Brisbane City | Unit | $480,000 | $2,450 | $2,080 | $370 |
South Australia
The best gross monthly returns among units in South Australia are higher than for houses but both can be found in the northern Adelaide suburbs, PropTrack data has found. The top suburb for units, Salisbury, has estimated gross monthly returns of $280. Meanwhile, Smithfield Plains tops the list for houses, at $250.
| Suburb | Type | Median Price | Median Monthly Rent | Monthly Mortgage Repayments | Gross Montly Return |
|---|---|---|---|---|---|
| Smithfield Plains | House | $327,000 | $1,660 | $1,410 | $250 |
| Elizabeth Downs | House | $328,000 | $1,630 | $1,420 | $210 |
| Elizabeth North | House | $294,000 | $1,470 | $1,270 | $200 |
| Salisbury | Unit | $330,000 | $1,710 | $1,430 | $280 |
| Walkerville | Unit | $372,000 | $1,880 | $1,610 | $270 |
| New Port | Unit | $320,000 | $1,640 | $1,380 | $260 |
| Kurralta Park | Unit | $2354,000 | $1,780 | $1,530 | $260 |
Western Australia
The state has highly profitable homes compared with the national average, especially in the mining-heavy regions. The owners of houses in the highly profitable suburb of Baynton on WA’s north coast earn a gross monthly return of $1990 on a median house price of $655,000. And units in the state’s profitable suburbs can earn as much as houses. However, these returns in WA involve a high level of risk because the local economy is heavily dependent on the mining industry.
Credit: realestate.com.au
Here are some other locales in the state with good prospects.
| Suburb | Type | Median Price | Median Monthly Rent | Monthly Mortgage Repayments | Gross Montly Return |
|---|---|---|---|---|---|
| Baynton | House | $655,000 | $4,820 | $2,830 | $1,990 |
| Port Hedland | House | $725,000 | $5,050 | $3,130 | $1,920 |
| South Hedland | House | $385,000 | $3,240 | $1,660 | $1,570 |
| South Hedland | Unit | $230,000 | $2,580 | $990 | $1,590 |
| Port Hedland | Unit | $385,000 | $2,740 | $1,660 | $1,070 |
Australian Capital Territory
Bruce, which is very near Canberra, has recently grown in popularity. It has many high-profile schools and a range of dwelling types, including townhouses and apartments.
| Suburb | Type | Median Price | Median Monthly Rent | Monthly Mortgage Repayments | Gross Montly Return |
|---|---|---|---|---|---|
| Gungahlin | Unit | $455,000 | $2,250 | $1,970 | $280 |
| Wright | Unit | $525,000 | $2,470 | $2,270 | $200 |
| Phillip | Unit | $530,000 | $2,470 | $2,290 | $180 |
| Bruce | Unit | $484,000 | $2,270 | $2,090 | $170 |
We Can Help!
The rewards of finding a cashflow positive property are significant, and with the help of a mortgage broker, you’ll be one step closer to achieving your property investment dreams.
Our Home Loan Experts are here to help you make an informed decision and secure a mortgage that suits your unique financial situation. Feel free to discuss your goals with our mortgage brokers. Call us on 1300 889 743 or fill in our free online assessment form today!
