Property investment is a fantastic way to build long-term wealth because you can enjoy tremendous capital gains over the long term. But it’s also vital to keep an eye on the short-term because if you can’t meet your mortgage repayments, you’ll be forced to sell your investment property and miss out on all that future price growth.
That’s why you need to pay close attention to the yield, or cash flow, of the property, especially in an environment of rising interest rates. With that in mind, here are seven Tasmanian property investment locations (presented in alphabetical order) where you can buy properties with strong yields of 5% and above.
Devonport (average yield 5.50%)
Devonport is a city of the north coast of Tasmania, with a population of 30,000, and is the southern terminus of the passenger ferry that runs between Victoria and Tasmania.
Over the five years to May 2022, asking prices for the Devonport 7310 postcode increased by an average of 74.3%, according to SQM Research. At the same time, rents increased by an average of 39.9%. So investors who held a Devonport property during that period would’ve enjoyed strong price and rental growth.
George Town (average yield 7.00%)
Also on the north coast, and just 40km to the east, is George Town, which is Australia’s third-oldest settlement, after Sydney and Hobart. For property owners, asking prices increased 81.4% over the five years to May 2022, while rents increased 48.2%.
Legana (average yield 5.05%)
Legana is a lovely town that offers the best of both worlds – the peace and quiet that comes from living in the country and the convenience that comes from being just a 10-minute drive from Launceston. Legana’s property market performed well over the five years to May 2022, with asking prices rising 63.4% and rents 22.9%
Newnham (average yield 5.25%)
Close by is Newnham, a suburb in the north of Launceston. Over the five years to May 2022, property investors enjoyed 82.0% growth in asking prices and 65.4% growth in rents.
Prospect Vale (average yield 5.50%)
Prospect Vale, meanwhile, is a suburb in the south-west of Launceston. It is part of the 7250 postcode, which also includes the Launceston CBD. Over the five years to May 2022, the 7250 postcode delivered strong returns for investors, with asking prices surging 72.1% and rents 45.3%.
Riverside (average yield 5.50%)
Riverside is also part of the 7250 postcode.
St Leonards (average yield 5.00%)
St Leonards is another Launceston suburb within the 7250 postcode.
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Remember, this article does not constitute financial or legal advice. Please consult your professional financial and legal advisors before making any decisions for yourself.