SA regions where typical rental properties are “cash flow positive”

The country’s ongoing rental crisis has been brutal for tenants but a boon for landlords. These are the SA suburbs where you can make the most from rent.

The country’s ongoing rental crisis has been brutal for tenants but a boon for landlords.

Real estate investors now have an opportunity to snap up properties that will earn them thousands in cold hard cash while costing nothing to own because soaring rents will cover the mortgage bills.

Analysis of PropTrack and Reserve Bank figures showed hundreds of locations around the country where the typical rental properties were “cash flow positive”.

This meant the rent eclipsed the mortgage repayments and left the landlord with a profit.

The new data reveals 17 SA suburbs or towns where investors can purchase cash flow positive properties, with the biggest gain to be found in Port Pirie West.

Houses there have a median sale price of $135,000, and command a median weekly rent of $260.

Weekly mortgage repayments come in at $172.82, leaving landlords $4533 in front each year.

Aerial view of SA suburbs Hallett Cove.

Quorn houses were the second strongest performers, with landlords $4398 in front annually.

The town has a median sale price of $180,000, and houses command a weekly rent of $315.

Weekly mortgage repayments come in at $230.43.

Of the locations identified, a mix of both houses and units were highlighted as the best SA buys, with all but four of them located in the state’s regions. The stars of Adelaide’s metropolitan suburbs are units at Ingle Farm, where you’ll pocket $1246 each year, Woodforde, where you’re bagging $1117, Bedford Park where you’re $543 up, and St Marys where you’re $198 in the black.

Propertyology head of research Simon Pressley said investors should do their homework if buying in a high cash flow location as some were risky.

“The risky markets are ones where there isn’t a diverse economy,” he said.

“If you go in with your blinkers on focusing only on cash flow you can get caught out.”

Rich Harvey, one of the country’s top buyer’s agents, said it was a good time to buy property for investors who “cared about cash flow”, but not all locations with high rental yields were good investments.

The Property Buyer founder said mining towns with high yields were often volatile markets.

“The rent increases need to be sustainable,” he said, adding that larger towns tended to have more diverse economies to prop up the property sector.

“It’s a great time to capitalise on the rental boom if you’re buying in an area with a healthy economy,” he said.

The data is based on an interest rate of 6.26 per cent – the current average rate for an investor loan product according the RBA – and it assumes you are buying with a 10 per cent deposit.