Regional QLD investors reaping the rewards of a tight market

Investors in regional Queensland are pocketing some of the biggest monthly profits in the country, as low vacancy rates and high demand push up rents across the state. >>Interactive

Investors in Queensland are pocketing some of the biggest monthly profits in the country, as low vacancy rates and high demand push up rents across the state.

And the big winners have put their money in the regions.

New analysis from realestate.com.au shows that investor cash flow – defined as the monthly median rent minus the monthly median mortgage repayment – is substantial across many locations, from holiday hamlets to hinterland and rural towns.

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REA economist Paul Ryan said regional areas often offered more affordable prices and higher rental returns.

Mr Ryan said rising values in hot markets was also likely to be pushing locals out into the regions, adding that anywhere with a rental yield above 5 per cent was doing “very well”.

“These places might be seeing more people moving there to try before they buy, while in some other areas, like the Gold Coast, for some it might be too expensive to buy,” he said.

“There are low vacancy rates right across Queensland and that is a big factor, and we know we have seen a huge number of people moving to Queensland from interstate.

“For investors, I think many are now trying to decide whether the exodus to the regions will be permanent, or temporary, which will guide their decision-making.”

Up north, there are eight suburbs in Cairns with all of the key ingredients for investors – capital growth, rental yield and demand.

Of those, Bentley Park house investors could be reaping the biggest rewards, potentially pocketing $631.03 after mortgage repayments.

One a low maintenance 735sq m block, this four bedroom house in Bentley Park is listed for $350,000 and is currently rented for $410 a week until November.

House investors in Smithfield, Trinity Beach, Mount Sheridan, Gordonvale, Mareeba and Kewarra Beach are also more likely to be ahead at the end of each month, while for units, investors should take a look at Port Douglas, where owners could be pocketing as much as $572 a month.

While in the Townsville region, the locations with the top rental yields are Home Hill (9.75%), Queenton (8.91%) Ingham (8.67%) and Charters Towers (8.61%).

In Townsville itself, there are 30 suburbs with rental yields north of 5 per cent.

In the Whitsunday region, house investors in Cannonvale came out on top with a potential cashflow of $576.04 a month.

Aerial shot of Townsville

NQ Buyers Agent founder Jennifer Smith said she was getting “plenty of interest” from investors, and from people who wanted to invest now and relocate later.

“I am getting inquiries every day from Melbourne and Sydney, particularly Sydney,” she said.

“Lockdowns have made people more aware of lifestyle.”

Ms Smith, who has offices in Cairns and Townsville, said vacancy rates were so tight, with people couch surfing as they tried to find a rental.

She said that demand was attractive to investors.

“If they can get in, good luck. That’s all I can say,” she said.

Elsewhere, there are two solid cashflow suburbs in Toowoomba – Harristown ($415.64) and Glenvale ($408.83).

This four bedroom house at Harristown is listed for offers over $389,000 and is currently rented for $380 a week until September

And in Gympie, investors are cashing in, potentially pocketing between $208.15 (Southside) and $398.37 (Gympie).

On the Gold Coast, there are seven unit markets where investors are reaping the rewards of the tight rental market.

In Mudgeeraba, landlords are potentially pocketing $650 a month after repayments, while the other top earning suburbs are Nerang, Carrara, Coombabah, Southport, Biggera Waters and Surfers Paradise.

Small business owner Siobhan White originally purchased her waterfront unit on the Gold Coast as a holiday base three years ago.

Ms White and her family moved into the Biggera Waters apartment to ride out last year’s Covid-19 lockdown, before renting out the property when she was able to re-open her business.

Siobhan White – Picture: Richard Walker

The Brighton mum-of-two capitalised on annual growth in rental demand in the suburb of almost 20 per cent, with Biggera Waters named among Queensland’s investor hot spots, according to REA Group.

“The rental market is really good and we have had lovely tenants in for more than 12 months now,” she said.

“When it sells we’ll have equity to set up two new businesses.”

But on the Sunshine Coast, where values have gone through the roof, yields and cashflow have pulled back, with only Nambour emerging in the top 30 across the three key metrics, according to REA Group.

Mr Ryan said rising house prices had likely put a lid on rental yields.

“I think this story has more to play out and I suspect rents will continue to rise in many regions,” he said.

“And while borrowing rates remain low, and yields remain favourable, that means lots of potential for capital growth.”

Originally published as Regional QLD investors reaping the rewards of a tight market