How To Choose High-Yield Properties

Right now, many property investors are seeking locations with above average rental yields.

Buying properties that offer a positive cashflow situation is always a good idea, in my view, provided the location has the credentials for long-term growth.

But now more and more investors are looking for superior rental yields – because interest rates are rising, and may rise further.

Finding those positive cashflow scenarios has become harder, not only because borrowing costs are rising, but also because recent strong price growth has pushed down yields.

This may encourage some investors to consider real estate in high-risk locations that offer rental yields of, say, seven or eight percent.

But that’s not the way to go, because these kinds of locations often usually resources-related places and they tend to be boom-bust markets and therefore very risky.

So here’s my idea of the correct mindset to bring to this situation – offering a strategy that can deliver above average capital growth potential, safely, as well as the level of yield needed to cover the costs of ownership.

The idea is this: don’t consider a property only on the initial yield it offers.