A property’s rental yield is the amount of gross rental income that it attracts relative to its market value. In Australia, gross residential property rental yields typically fall between 2% and 5% annually. This yield can provide insights into a property’s fundamentals and therefore anticipated investment returns. What drives a property’s rental yield? Two primary…
Articles by Stuart Wemyss
Stuart was a Chartered Accountant before establishing mortgage broking firm ProSolution Private Clients. He has authored two books and shares his experience with readers of Property Update. Visit www.prosolution.com.au
There is one property investing golden rule that is more important than everything else. And if you nail this ‘one thing’, you are guaranteed to build wealth over the long run. This statement might sound sensationalist, but I honestly cannot overstate this point. The golden rule is that the quality of the property you invest in will determine your…
The unrefuted trend in all investment markets is mean reversion. It means that a period of below-average returns is always followed by a period of above-average returns. My thesis is that investment-grade property in Melbourne looks attractive compared to other markets and that several economic tailwinds may result in median house prices doubling over the…
Many people face two financial planning challenges. Firstly, their projected super balance may not be enough to fund their desired living expenses in retirement. Secondly, they would like to enjoy the flexibility of being able to reduce working hours (or even retire in full) in their 50s. Often, the solution to these two financial planning…
A few weeks ago, I discussed the limitations of using monetary policy – increasing interest rates – to tackle inflation. I highlighted that only 37% of Australians have mortgages, so they are the only ones that are directly affected by higher rates. Conversely, around 30% of Australians without mortgages benefit from higher interest rates as they earn…
In 2007, laws changed to allow SMSFs to borrow for property investments if they met specific compliance rules. This led to a surge in super-funded property investments from 2007 to 2017, totalling around $45 billion. However, major banks withdrew SMSF borrowing products between 2017 and 2018 and super contribution rules were tightened, making this strategy…
When the weather gets warmer and you start enjoying those longer, lazier days with summer coming up, it’s easy to get caught up in the romance of acquiring a holiday home. While there’s not necessarily anything wrong with owning a property intended more for vacation fun than financial gain, purchasing a holiday property is usually…
The transition away from active funds management towards passive management is gaining more momentum with each year that passes (for the reasons I discussed in this blog). Given that passive investing is becoming increasingly popular, I thought it was timely to provide an update on the advances that have occurred in this marketplace. Active vs passive…
The ‘great Australian dream’ has always been to own your own home, debt free. It gives you financial security, and over the past three to four decades, homeowners have enjoyed rising prices which has helped them build wealth. But is it always a good idea to own your home, or is renting better? Put differently, how financially…
There’s a story that Henry Ford was having problems with a generator in one of his plants so he hired General Electric (GE) to fix the problem. The engineer from GE climbed up on the generator and made a chalk mark and told Ford’s people to replace sixteen windings from the field coil. The job…