New research has revealed the best locations for property investors to secure a house on a deposit on less than $100,000.
The data, curated by Eventus Financial, crunched the numbers on a suburb-by-suburb basis and according to set criteria designed around creating value for property investors looking for both rental yield and long-term capital gains.
The Eventus Financial $100k Investment Report focused only on standalone houses, which are a surer bet for long-term returns, and disregarded suburbs with a median house value of above $1m, a vacancy rate of higher than 1.5% or with a high level of building approvals.
Furthermore, it also took into account the number of owner-occupiers in the area, excluding those seen as high-renter areas, with less than 65% owner-occupiers and those with very few renters, or with more than 90% owner-occupiers.
Safety Beach in Coffs Harbour came up trumps, followed by Tyabb on the Mornington Peninsula in Victoria and Valley Heights in the Blue Mountains.
The top 10 shared many similar characteristics: most were in regional areas with strong transport connections back into the major cities, perfect for those who were now mostly working from home but with a need for occasional meetings in Sydney or Melbourne.
“If you want to put down a 20% deposit on a house close to the centre of a major capital city, you’ll need much more than a $100,000 deposit,’ said Alex Veljancevski, CEO of Eventus.
“But if you’re willing to be open-minded about your loan-to-value ratio and location, you can definitely buy a good investment property with a $100,000 deposit,
“If your deposit is less than 20%, you’ll probably have to pay lender’s mortgage insurance, or LMI, which is an insurance policy designed to protect the lender in case you default.
“That might be more than $20,000, which is a lot of money. But if paying LMI were to allow you to enter the market a couple of years ahead of schedule, it might seem like a bargain if property prices were to increase, say, $50,000 in that time.
“If you’re a first home buyer, you might also be able to qualify for first home buyer assistance, depending on which state you live in and the rules of your state’s scheme.”
