Annual suburb growth / Rental yield figures

Just wondering what would be a good range to aim for when searching areas to purchase an investment property?

Dummy search shown on the web link below:

Epping Investment Property Market Data

5% rental yield enough?
20% suburb growth to much?

I've been looking all over Melbourne to see different stats. Both lower and higher then the epping example above.

 

Epping link was only an example. Looking at 4 room houses, average price rnge of around 500k.

Will screen shot my spreadsheet today of what I've taken note of.

 

Please be careful when looking at annual growth over 10 years.
Current property cycle is around 15-17 years. 10 years will completely ruin the correctness of the data and you will end up making a massive mistake.

Suggest you read a book on the property cycle (by Trass is an excellent one) and you will understand why your current thinking (which is normal to think of when you don't yet know the bigger picture) is so out of whack with the reality of the property market.

If you go by Sydney over last 10 years vs Sydney between 2003 and 2013, the growth will be so different that you will not even believe it is the same location.

 

I don't see how those cash flows are correct. Take off 30% from the gross yield to get net yields and then compare to the interest rate you are using. Yield of 4.1% isn't going to be anywhere near CF positive without deductions.

 

I'm not really fussed in regards to the cash flow that was showing to me. If rent 100% pays the mortgage, if would be great; but if we need to factor in the difference from our own pocket, we will manage.

Thinking of now going through a buyers agent, after the bank provides pre-approval.

 

when market is flat for many future years,

even when rent pays all expenses and the mortgage, that's not enough. To be positive, it should give you more than if you invest your deposit somewhere else (term deposits, non-risky shares, etc), otherwise it can be considered as loss.