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Feb 2, 2023
How To Calculate Rental Yield For Your Investment Property
Are you considering purchasing an investment property in Nelson Bay? If so, you are likely in the middle of researching the potential rental yield of the current properties for sale in Nelson Bay. Calculating rental yield is a good place to start when you are deciding whether or not a property has the potential to be a good investment. Rental yield is a measure of the return on investment for a rental property, determined by calculating the gap between your overall costs and the income generated. It helps assess the profitability of a rental property and can be used to compare investment options. A high rental yield indicates a property is generating a significant return on investment, while a low rental yield suggests the property is not performing well as a rental investment. Residential vs commercial Residential and commercial investment properties are different types of properties that are used for different purposes. Key distinguishing features include: Tenants: Residential properties are typically leased to individuals or families for use as a primary residence, while commercial properties are leased to businesses for use as office, retail or industrial spaces Lease terms: Residential leases are often shorter, while commercial leases can be much longer Income: Residential properties normally generate rental income from one or a few tenants, while commercial properties can generate rental income from multiple tenants Operating expenses: Residential properties generally have lower operating expenses, such as utilities and property taxes, while commercial properties may have higher operating expenses, like elevators and security systems Zoning and regulations: Residential properties can be subject to different zoning and building regulations than commercial properties, which can affect the property's use, maintenance and development potential Risk: Residential properties are considered less risky than commercial properties, as commercial properties have a higher possibility of vacancy and tenants can be very specific on location, size and the condition of the space When it comes to calculating rental yield, the process is similar for both. However, what’s considered a good rental yield may be influenced by the above factors, among others. Calculating gross rental yield Gross rental yield can be calculated with the following steps, and applied to both residential and commercial properties: Determine your annual rental income (weekly rental income multiplied by 52) Divide your annual rent by the property’s value Multiply that figure by 100 Gross rental yield = (annual rental income / property value) x 100 Gross rental yield example: John purchased a property for $500,000 which he rents out for $400 per week (400 x 52) / 500,000 x 100 The gross rental yield is 4.16% Calculating net rental yield Net rental yield is slightly more complicated, but can be calculated with the following formula: Determine your annual rental income (weekly rental income multiplied by 52) Subtract the total annual expenses Divide that figure by the value of the property Multiply that figure by 100 Net rental yield = (annual rental income – annual expenses) / (property value)) x 100 Some of the expenses you might consider including are: Repairs & maintenance Council rates Property management fees Legal fees Advertising Insurance Depreciation Vacancy costs Building inspections Agency fees Net rental yield example: John purchased a property for $500,000 and now receives $25,000 each year in rent but pays $10,000 in expenses annually. (25,000 – 10,000) / 500,000 x 100 The net rental yield is 3% What is a good rental yield? The average rental yield can vary depending on factors such as location, property type and local real estate market conditions. What’s considered a good yield can also change over time as rental income and property values fluctuate. Generally, a higher percentage indicates stronger cash flow, but an overly high rental yield may come at the cost of lower or slower capital growth potential and can mean the property is undervalued. As a guide, a high rental yield would generally be considered between 8-10% while a low rental yield might be closer to 2-4%. Contact Us If you’re interested in purchasing and investment property in Nelson Bay and are after more detailed information on the average rental yields of properties in the region, don’t hesitate to reach out to our team at Nelson Bay Real Estate on 02 4981 2655 to make an appointment with one of our local real estate agents. @media only screen and (max-width: 600px) {.h2-style {font-size:23px !important;}} @media only screen and (max-width: 600px) {ul.\32 -cols {column-count:1 !important;}}
Nov 25, 2022
Can I Rent Out My Granny Flat In Nelson Bay?
Whether you're looking to earn some additional income or you're just wondering what to do with this extra space you no longer need, renting out your granny flat could be a great option for you. So, what is actually considered a granny flat and can you list one as a rental property in the Nelson Bay region? Read on to find out more about the local laws and regulations surrounding this. What Is A Granny Flat? A granny flat is considered a small and separate building away from your main house traditionally built for an elderly parent/s or relatives to live or stay in long term, which is where the name originated from. A granny flat is usually self-contained, meaning it contains a kitchen and bathroom as well as living space. These facilities would typically be very compact. Can I Rent Out My Granny Flat In Nelson Bay? The short answer is yes, it is legal for you to rent out a granny flat in Nelson Bay. There are some rules and regulations that you will need to follow, however, so make sure to read up on these before you consider advertising your granny flat for rent. Regulations Around Building Or Renting Granny Flats Any kind of granny flat or secondary living space needs to be approved before you can begin building. To be rented out, the space has to be self-contained, meaning it has to have its own kitchen and bathroom to make it livable. You can read up more on the specific NSW regulations online here. If you are planning on renting the granny flat to someone outside of your family, you will also need to be aware of the tax implications of this. Any earnings will need to be reported to ensure you are paying the correct tax. If you are renting to somebody within your family, however, there are exceptions. Benefits Of Renting Out Your Granny Flat Renting out your granny flat is a great way to earn some extra income for minimal work. The amount you could earn will depend on the size of the flat and what features it includes. If you are building a granny flat from scratch for this purpose, it could help to look into what features could improve potential earnings. A granny flat can also be a great choice as approval to build can be given in as little as three weeks. Additionally, having a granny flat on your land is a great way to improve the value of your property in the event that you decide to sell in future. Who Can Help With The Renting Process? Renting out your granny flat can be a confusing process, especially if you haven’t been a landlord before or don’t have experience in property management. This is when Nelson Bay Real Estate is here to help. With almost four decades of experience, we know all the ins and outs of real estate and property rental and can make managing your tenants and paperwork much easier. @media only screen and (max-width: 600px) {.h2-style {font-size:23px !important;}}
Oct 16, 2022
How To Buy Real Estate In Nelson Bay - 2022 Update
The real estate buying process can be an intimidating one, especially in such a hot market. Purchasing a home, whether it's your first or first in a while can be a tricky process even after taking out the stress as much as possible. So, if you're new to the process or unsure on the latest processes for purchasing property in NSW, here are the steps you will need to take when buying real estate in Nelson Bay and surrounds in 2022. Finances The first thing you will need to do is get your finances sorted. Figure out exactly how much you have available to contribute to a deposit. When applying for a mortgage, you will likely be expected to contribute at least 10% of the purchase price upfront. You can go to a few different banks and find out how much you will be able to borrow. This amount will be specific to your savings, income and other personal and financial details like your credit score. It will also depend on many other market factors heading towards the end of 2022 as interest rates have been on the rise. It is also important to consider the other fixed costs associated with moving, including removalists, solicitors' fees, building and pest inspection costs and buying any furnishings that you will need when you first move in. The money for these needs to be set aside so that the initial expenses are fully covered. Property search Once you have established how much you can spend and how large a mortgage the bank will offer you, you can move on to searching for houses. It is important to sort out the financial side of the process before you get too involved in your property search. It can be very upsetting to have your heart set on a particular property and find out further down the track that it is out of your price range. It can become a stressful task if you have a low budget, especially in the current sellers’ market in the region that is making competition high for buyers. Consider looking outside of your initial region that you were considering to give yourself more properties to consider. Some of the key features to focus on and keep you on track are location, parking and the number of bedrooms in the home. This will ensure you find a place you are interested in that also suits your specific needs. Keeping an open mind during this process will help you Making an offer Before making an offer, you can ask for a copy of the sale contract and pass this on to your solicitor to ensure everything is in order. You can then submit a verbal or written offer and your deposit (which will be refunded if your offer isn't accepted) and wait to hear if your offer has been accepted. Legal requirements and the contract It is recommended that you hire a solicitor or conveyancer to assist you with exchanging all legal documents. This includes arranging payments and the change of title. It usually takes a minimum of 30 days for the settlement to go through, which is when the house is officially handed over to you. If you are looking to buy a property in Nelson Bay but are still a little unsure of what property is best for you or how you should go about making an offer, get in touch with Nelson Bay Real Estate and let us help you find the right home your you in the region.
Sep 12, 2022
What Is It Like Living In Nelson Bay?
Nelson Bay is a town in the Port Stephens region of New South Wales, Australia. It is a popular tourist destination with beautiful beaches, and great fishing spots. It's also a highly desirable place to live. Read on to find out what it's really like to live in this region and some of the reasons why so many choose live in and invest in real estate in Nelson Bay. About the region Nelson Bay is part of the Central Coast Council local government area. The town has several shops including a supermarket, various restaurants, cafes and bakeries, with many of the outlets found along its main street, Durant Road. It's also home to popular tourist attractions including dolphin watching tours, fishing charters and scuba diving excursions, making it a friendly, vibrant place to live. Proximity to the beach The town of Nelson Bay is a true coastal gem and is known for its beautiful beaches and rolling hills, as well as its proximity to other coastal towns like Shoal Bay and Anna Bay. If you're a family hoping to spend your weekends at the beach, Nelson Bay is perfect for regular beach going. There are some beautiful beaches such as Samurai and Fly Point where the water is clean, clear and patrolled by lifeguards so you can enjoy being in the water safely. Perfect for families When looking for a place to live, you want somewhere where you and your family can feel safe. With its low crime rates, excellent schools and beautiful natural environment, Nelson Bay is the perfect place to raise children. Despite being outside of the city, it's near both Sydney and Newcastle, letting you avoid the city day to day but also have the ability to visit when you need to without the trip being too large. Work-life balance There are local job opportunities locally, and without the road congestion of a city, you can easily travel to neighbouring towns to work daily. Living in Nelson Bay is a great option for those who have the ability to work from home while living in a peaceful location that they can enjoy out of work hours. Tourism and the economy Tourism in the region creates a vibrant atmosphere during the warmer months. This also brings much needed spend at local businesses and hospitality venues which in turn boosts the local economy. If you are after a slower pace of live and a lifestyle closer to nature – Nelson Bay and the surrounding region is an ideal location to live and consider investing in a property in. As the local real estate experts in Nelson Bay, we understand the local region and can point you in the right direction when it comes to finding an ideal property for sale locally. Contact us today to discuss your specific needs in a property and we will be able to share with you our latest listings of properties for sale that could best suit your needs.
Aug 5, 2022
Commercial Property Vs Residential Property Investments
If you're considering investing in property, it can be hard to know where to start, especially when choosing between commercial property and residential property as an investment. In this blog, we will go over some of the pros and cons of investing in both of these types of Real Estate and their key features and benefits. Income Yields Because they are typically much larger and can house more tenants, the income yield is usually higher for commercial properties. This means they are more likely to be cash-flow positive. However, this does depend on many factors, including the ones we will mention below. Stability And Consistency Of Income Leases tend to be longer for commercial investments, which offer more stability than residential leases, as these can be as short as a few months. However, this is only a benefit for as long as there is a tenant in place Because of the higher risk on commercial leases and the unpredictability of the market, it's harder to replace a commercial tenant than a residential one. While there will likely always be people looking for somewhere to live, there may not be people looking for commercial property, so there are more likely to be longer vacancy periods, meaning the investor will have to cover outgoings without rental income during this period. Reliable Tenants Another benefit of investing in commercial real estate is tenant reliability. A commercial tenant has good reason to keep their rental in good condition because they will often be relying on it to appeal to customers and clients to see profits. This is not the case with a residential property. Maintenance With the previous point in mind, this is especially relevant. A commercial lease is able to state that the tenant has to pay for ongoing costs and maintenance, something that residential leases can't. So, should something go wrong in a commercial property, it's the responsibility of the lessee rather than the investor, meaning they can often see a bigger return on investment due to lower outgoings. Lease Terms However, residential leases, while less flexible, have the benefit of being straightforward and fixed, so the process is streamlined. On the other hand, the differences between individual commercial leases can be huge depending on the type of building and a raft of other factors, meaning investors have to work harder to draw up a lease and may need to pay to hire a lawyer or financial advisor to get this done. Whatever type of property you choose to investment in, our local, expert real estate agents in Nelson Bay can help you find commercial or residential properties in the area. Call us today to discuss our current real estate listings available for inspection in Nelson Bay. @media only screen and (max-width: 600px) {.blog-h2-style {font-size:23px !important;}}
Jun 27, 2022
Nelson Bay Local Real Estate Market Update 2022
Property prices are a hot topic at the moment, as unprecedented growth means there's been a huge upsurge of interest in the market. Many people are wondering what the future holds for property prices in Nelson Bay and whether now is the time to buy. At Nelson Bay Real Estate, we have almost 40 years of experience in buying and selling property in Nelson Bay. We know the market can be difficult to navigate, so we’ve put together a round-up of Nelson Bay property prices so far in 2022 to keep you informed. Latest Facts And Figures Let’s start with what we know. Over the last year, the median property price for a house in Nelson Bay grew to $950,000, while the median price for a unit reached $580,000. Growth in house prices is up to 32.9%, which is vastly above the national figure of 23.7%, while growth in process for units sits at 20.8%. For those looking for an investment property, the rental market is still strong, with houses bringing an annual yield of 3.1% and units delivering a 4.0% yield. How Do 2022 Property Prices In Nelson Bay Fit With National Trends? Property prices in Nelson Bay are much higher than the national trend and are also higher than similar areas such as Corlette and Anna Bay. This growth is fuelled by the continued desire for pandemic-proof properties, as well as Nelson Bay’s popularity with older homeowners looking to secure their forever houses. Will Property Prices In Nelson Bay Crash In 2022? The huge amount of growth over recent years has caused many people to speculate on the likelihood of a property price crash in 2022. Whilst it’s impossible to predict these things, we don’t think that a crash is inevitable. There’s evidence that growth is slowing, and we are seeing a general trend away from the sense of panic that fuelled the Nelson Bay property market during late 2021. This means that property is taking a little longer to sell, which means a slight leveling off in prices, but we’re not seeing any sign of a dip in what people are happy to pay to live in Nelson Bay. What other factors will influence Nelson Bay house prices in 2022? The key driver for properties in Nelson Bay appears to be the ongoing desire to live in a pandemic-proof neighbourhood. People want somewhere they can enjoy outdoor space easily, and somewhere with enough space internally to cope with a pandemic situation. If you’re selling or bringing a home to the rental market, it’s essential to showcase the space available and maximise your outdoor living options. Get In Touch Our team at Nelson Bay Real Estate have years of experience in helping people buy, sell and rent in the area. We have a range of properties for all types of buyers available for viewing now. To find out more, just get in touch using our online contact form, or call us on 02 4981 2655 to discuss your specific needs so that we can assist you. @media only screen and (max-width: 600px) {.blog-h2-style {font-size:23px !important;}}
Apr 21, 2022
What To Look For In A Property Manager?
When you have spent a significant amount of your hard-earned money on an investment property, you want to be sure that your property and tenants are being looked after properly. If you’re not planning on doing this yourself, it’s essential that you have a great property manager on your side that you can trust. If you’re not sure what to look for when hiring a property manager, we can help. Take a look at what we think you should look for in a property manager before committing to a one. 1. Proactive A proactive attitude is incredibly important in a property manager. Having a proactive attitude allows a property manager to deal with each problem efficiently, which is essential, especially when tenants or potential tenants are involved. It is also a great indicator that they care about getting the job done correctly and in a timely manner. 2. Time Management Property managers often have a big workload on their plates, so good time management is necessary for a good property manager. With a typical day including property inspections, open homes, phone calls, business meetings, answering emails, and organising maintenance repairs, property managers are usually busy 24/7. Knowing how to manage their time effectively and prioritise more pressing tasks is essential. 3. Detail-Oriented A great property manager will know how to focus on the right details to ensure that they are doing their job efficiently. From screening potential tenant applications to keeping detailed notes on current tenants, entry reports, maintenance issues, and requests. Ensuring that record keeping is detailed and accurate is essential to avoid any issues with tenants or the property. 4. Flexibility Flexibility is also a key attribute of a good property manager. No two days are going to be the same and often a property manager may be called off for unexpected visits or inspections. Knowing how to react to sudden changes, work their way through them and then replan if necessary is an ability that a good property manager needs. 5. Ability To Multi-task Often, property managers will have several different tasks going on at the same time. From scheduled inspections to incoming phone calls and emails that might be urgent, being able to multi-task is essential. If a property manager can handle several tasks at a time they’re likely to be great at their job. Securing the right property manager for your property can sometimes be a difficult task. You want to ensure that your property is well looked after by a competent property manager while also ensuring that your tenants are happy and taking care of your property as well. Taking the time to find a good property manager can help keep many common issues of being a landlord at bay. You can be confident that your property is in good hands and that you won’t have to handle the stress and time yourself. If you’re in the market for a great property management team to look after your investment property in Nelson Bay, Tanilba Bay, Tomaree Peninsula & Tilligerry you can get in touch with our local team of experts today. We can help you manage your property in a reliable and professional manner and are happy to discuss what we can offer you. If you need some tips on choosing the best property for sale or are looking for a property manager to handle your accounts, you can read these guides. How to Get Started Investing in Commercial Property What You Need To Know Before Purchasing Commercial Real Estate 7 Ways to Add Long Term Value to Your Nelson Bay Property @media only screen and (max-width: 600px) {.blog-h2-style {font-size:23px !important;}}
Mar 2, 2022
3 Things To Consider When Buying Land For Sale
Buying vacant land for sale in Nelson Bay is often the best way to get the dream home that you have always wanted. Instead of trying to renovate or change an existing property, you have a clean slate to build a home that will perfectly suit your exact requirements. But before you fall in love with the perfect block of land, there are some important considerations to factor in to help you decide if this is the best choice for you. Find out what we think are the 3 things you should consider before making an offer on a block of land for sale in Nelson Bay. Understand the zoning restrictions Knowing the council zoning of the land you are looking to purchase is essential. You need to be assured that the land is zoned in alignment with the construction build you have in mind. There may be restrictions in place that prevent you from subdividing, constructing multi-story homes or complexes, or even restrictions that prevent you from building a home at all. It is also important to understand the zoning restrictions for the surrounding area and not just the land you are looking to purchase. Just because the land you are purchasing may be zoned for residential use, that doesn't mean that neighbouring blocks of land will be. For example, if you are looking for land to purchase for a quiet family home, you don't want a busy commercial or industrial complex built next door. If you are purchasing land because of the views of nearby green spaces or waterways, you want to be assured that a five-storey unit complex is not going to be built near your property that will completely obstruct that view. Exposure to the elements If a block of land seems too good to be true, there are usually reasons for that. It is important to check whether the land sits in a region that regularly floods or is at a high fire risk. You can get this information from the council and also the state government. There are also experts that can assess the land for any of your concerns and come back to you with a professional opinion on whether you should proceed with the purchase. Not only is exposure to extreme weather events a hazard to your home and the safety of your family, but it will also mean your insurance premiums may be higher than average. In some cases, you may not be able to secure insurance at all. The quality of the land itself There are many factors to consider here. If the land quality is poor, it is going to be difficult and more expensive to excavate and install the foundations for your new home. The quality of the soil and its composition play key roles in your decision, as hard, rocky soil is going to make every aspect of construction and landscaping more challenging. The grade of the land needs to be considered too. If it is on a slant or is uneven, there is going to be extra work required to level it or design a home specifically for a slant or on the side of a hill. Consider the orientation of the land as well. Ideally, you want to purchase land where your home will be able to be constructed facing north. This way, you can maximise the available sunlight without having spaces in your home that are too hot and bright in the morning or afternoon. Are you ready to start your search for land for sale in Nelson Bay and the surrounding region? Our agents are local experts and can assist you with available land and property for sale in Nelson Bay, Tomaree Peninsula, Tilligerry & Tanilba Bay . You can contact us and our professional and expert real estate agents in Nelson Bay on 02 4981 2655 to discuss available and upcoming property today.