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High Yield High Risk Property Investment – What You Should Think About

When it comes to calculating the rental yield of a property, it’s only natural as a property investor to look for opportunities that show the highest amount of rental yield.

However there might be a fair amount of risk attributed to high-yield properties, and as such, you have to be sure to take a holistic view of the property to find out if it will contribute to your portfolio. If you are unsure how to go about it, we have some pointers for you to keep in mind:

The location

A high rent yield is definitively a good indicator to look out for when deciding on a property investment, however, is shouldn’t cloud your judgement around one of the most important indicators in the business – location of the property. While it’s true that the yield on a property at an under-performing location can look great, you have to keep in mind that you might not realise the capital growth that you need from the investment.

Costs

Another consideration you should make before taking on a property, is ensuring you have a firm understanding of the costs involved in maintaining and holding the property. There is always a chance that a high-yield rental property might be subject to reduced cash flow, which can put a serious damper on your long-term gain from the investment.

Can you weather the market?

Many high rental-yield properties can be found next to various mining-based areas in the country. While there is no reason why these properties can’t provide an excellent return on your property investment, they can be subject to changes in the market. This means that if your portfolio is not set up to weather any negative changes in the market, a high rent-yield in these specific regions might not be the best investment opportunity for you.

Luckily one of the best ways to counter these risks is to identify them and set up contingencies that will help mitigate them in such a way that you come out ahead. If you’re looking for property advice specifically aimed to help your high yield investments, contact us today!

Related Tag: Australian Property Investment Advice

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By |2018-10-07T00:08:36+00:00July 7th, 2018|Categories: Non-resident, Property Investing|Tags: , , |

About the Author:

Wise Guru is your expert adviser based here in Singapore for investment in Australian property. We work with expatriate clients to provide a complete, tailored concierge service for each of our clients from finding the right property based on your own situation, projecting and managing your cash flows, structuring and arranging your financing and working with a team of professional settlement agents and property managers to ensure your property is tenanted, saving you time and money.

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