Research Rental Income Per Week
As I mentioned, even if you are intending on making this property your home it’s worth knowing what you could rent it out for in the future—to give you options, and also help you understand if it could be sold as an investment property in the future.
The fundamentals for a strong rental market include:
Low vacancy rates—Vacancy rate is the number of rental properties on the market that are vacant. Paddington’s vacancy rate is trending lower currently at 3.1% which is a good sign.
Stable weekly rental—Stable weekly rent shows the market is not in decline or growth. Paddington’s average weekly rent for a three-bedroom house is picking up with a 1% increase on the quarter.
Good rental yields—The rental yield is calculated as the gross annual rental, divided by the property’s value. So for 82 Charlotte Street, you might get $675 per week rent, on an $875,00 value = 4.01% rental yield which is broadly in line with the other rental yields in Paddington for three-bedroom houses.
Supply and demand in balance—If there is too much supply and not enough demand prices tend to soften. Whereas if there is too much demand and not enough supply the prices increase. The number of houses for sale in Paddington has remained fairly stable since 2012, compared to the number of units which has increased. Overall, the rental market in Paddington looks reasonable, and with a limited supply of new homes being built, you would expect the rental market to remain very stable over the next few years.
To find out how much rental you might get per week, you can either ask the real estate agent for a rental appraisal or have a look yourself.
Calculate (Potential) Rental Income
Working out potential rental per week is not an exact science. These are the same methods property managers use to determine the rental potential, and while they can be a bit subjective you can at least work out a broad idea on what rental to expect per week.
Method 1: Researching Rental Income Using realestate.com.au
- Have a look on realestate.com.au under Rent.
- Filtering for your target suburb.
- Matching your property’s characteristics as three-bedroom house, yard, pool, etc. you can see the rental range.
- In the example of 82 Charlotte Street the rental ranges from $650 to $700 per week.
Method 2: Researching Rental Income With RentPrice:
- Jump onto on RentPrice
- Again filtering for your target suburb.
- Matching your property’s characteristics.
The good thing is this site also shows sold prices on properties which are a few years old but can give you a good insight into what has happened in the suburb over recent years.