Rental demand
Rental demand refers to the level of interest or demand for rental properties in a particular location or market. It is a measure of how many people are actively seeking to rent a property in a given area. Rental demand can be affected by a variety of factors, including population growth, job opportunities, and the availability of affordable housing. High rental demand can lead to increased competition for rental properties, which can drive up rental prices. On the other hand, low rental demand can result in a surplus of available properties and lower rental prices.
An increase in rental demand has many added benefits. For one thing, the rental price of the property often increases, as tenants are putting forward a higher offer to try to lock in that property, as there is a lot more competition. The increase in demand also allows property owners to pick the most suitable tenant for their property.
As you can see at this link here, anyone can search a suburb of interest and access an entire profile on that suburb. This includes recent sales, rental yield, rental demand, and so on. This is a great tool for investors to research different suburbs, and try and find a suitable area for their next investment.
Rental yield
Rental yield is a measure of the return on investment for a rental property. It is calculated by dividing the annual rental income by the purchase price or value of the property. For example, if a property rents for $12,000 per year and the purchase price is $300,000, the rental yield is 4%.
Rental yield is an important metric for investors to consider when assessing the potential return on a rental property investment. A higher rental yield indicates a higher return on investment, making the property more attractive to investors.
It’s important to note that rental yield can vary depending on the location, condition and size of the property, as well as the current market conditions. For example, properties in high-demand areas with low vacancy rates may have higher rental yields, whereas properties in less desirable areas with high vacancy rates may have lower rental yields.
In general, rental yield is considered to be a good indicator of the cash flow generated by a rental property. It is also a good way to compare different investment properties, as it allows you to compare the income generated by different properties with different prices.