Ray White Surfers Paradise CEO Andrew Bell says low interest rates made owning an investment property attractive at any buy-in.

With the rental market tighter than ever, we reveal where first-time investors are looking to grow their cash and why.

First-time investors are looking to Gold Coast property hot spots to grow their cash, with huge rental demand for both houses and units in these areas proving a goldmine for savvy buyers.

Units in Surfers Paradise emerged as the property type most sought after by investors nationwide last month.

The Glitter Strip suburb famous for its high-rise lifestyle offered investors rental yield of 6.17 per cent. The median unit price for units there was $480,000.

Southport was another popular pick for investors, chalking up the fourth highest volume of inquiries per listing on www.realestate.com.au, REA Group data shows.

The Gold Coast CBD suburb has a median unit price of $442,600 and rental yield of 6.17 per cent.

With QLD’s current housing crisis pinned to record interstate migration and now residents displaced by flooding, Ray White Surfers Paradise CEO Andrew Bell said low interest rates and higher rents made owning an investment property attractive at any buy-in.

“There is a huge demand from tenants, so what has changed dramatically is most landlords have moved from a negative gearing situation to positive cashflow,” Mr Bell said.

“My advice for investors is to buy with the dollars and cents in mind, not with your heart. You are looking for buildings that give the best yield, you don’t necessarily have to buy one that you’d want to live in yourself.

“There is strong demand for all sorts of property — you don’t have to pay premium prices,” he said.

Investment accountant Mohamed Radwan in his offices at Harbour Town. Picture Glenn Hampson.

The investor sweetspot previously sat about $500,000 with a rental yield of 5 per cent, but many had been scared off as owner-occupiers became the dominant presence in markets ruled by a lack of supply and buyer FOMO over the last two years.

BuyersBuyers co-founder Pete Wargent said the investor buy-in had soared accordingly.

“For houses, $750,000 to $1.25 million is the new normal,” Mr Wargent said.

“Unit prices have generally increased but less dramatically.”

Latest Ray White data shows investors remain purchase-shy, with these buyers making up just 25 per cent of buyers from 406 auctions in January, Australia-wide.

Pimpama houses are snapped up fast, like this five-bedder at 5 Halifax Cct which is now under offer

Investors showed best confidence in Brisbane, accounting for 37 per cent of buyers at Ray White auctions in the QLD capital, followed by the Gold Coast with 35 per cent.

Houses in Pimpama were another top choice for investors, offering rental yield of 4.87 per cent. At the top end of the local market, offers of more than $1.4 million are sought for 32 Bunderoo Cct, Pimpama. It's marketed by Robust. The northern suburb has one of the lowest median house prices on the Gold Coast, at $572,000, and ranked twelfth among suburbs with the highest number of inquiries in February.

Broadbeach units also ranked highly for units, with a median price of $670,000 and 4.87 per cent yield.

INVESTOR TOP TIPS

• Don’t buy with your heart. Be ruthless and put the same effort into due diligence for buying an investment property as you would making any business decision.

• Location is key. Remember you want the location and the affordability of the property to appeal to the rental market. Check out vacancy rates and typical rents.

• Buy land. Land in fast-growing areas is the safest and best-performing asset you can invest in. As the population grows so too will the value of your land.

• Make sure there is more than one industry contributing to the local economy. Don’t invest in one horse towns.

• Ensure there is future infrastructure spending which will improve amenities.

• Ensure there is solid future population growth.

Source: James Fitzgerald/Bulletproof Investing

Originally published as Ray White Surfers Paradise CEO Andrew Bell says low interest rates made owning an investment property attractive at any buy-in.