Rental reality question

Hi all,
I've read the article and understand the concept BUT,
How will rental reality work for a suburb with very expensive estates on one end and cheap units on the other. As an example, I live in an apartment in bellevue Hill, sydney. Although I share this suburb with Kerry Packer, we look for very different investment opportunities
Now, if I was looking to buy an apartment in this suburb and tried to calculate rental reality for a unit, surely this figure will be distorted by the ridiculously high prices of some of the homes in this suburb.
How do I account for this?

 

Talbashan,

Yes, I think Sim is correct. Also, most reports split the dwelling type by price bracket. So, you can see the median price and rent for top 33% houses, middle 33% houses and bottom 33% houses in a postcode. So, when you are appraising a house in that postcode you can look at its price and determine which niche it is in. You can then use the rental reality for that niche to determine whether it represents good buying based on its current or projected rental income.

Here's a link to Aussie Valuer, the Aussie Houses website, which gives median prices for the last three years as well as current yield. It doesn't split yield by property niche, but Steve described where you can get this information in another post on this forum. I think he said you have to buy it from Residex or equivelant for around $60.

http://www.eaussie.com.au/aussie_valuer.htm

Cheers,
Michael.

 

thanks for that..
I didn't realise that yield info is separated into different price brackets.
cheers
tal

 

Which reports specifically do this, Michael? I haven't seen this either.

 

Jacque,

Check the link I posted above as a start. Aussie Valuer offer a free service and it is split into price brackets by house/unit category.

Cheers,
Michael.