Suburbs in four of the eight states and territories have recorded yields of over 10 per cent, according to new data.
Figures recently released by CoreLogic RP Data have revealed that Tasmania was home to the most suburbs with double-digit yields, with five suburbs in the Apple Isle recording rental yields of over 10 per cent.
Zeehan, a town on the west coast of Tasmania, achieved the highest yields in the country, recording gross rental yields of 13.81 per cent based on a median house price of $56,000.
Roseberry, also in Tasmania, recorded yields of 11.56 per cent ($67,500), Queenstown 11.46 per cent ($63,500), Tullah 10.28 per cent ($83,500), and Waverley 10 per cent ($130,000).
Queensland was home to four suburbs recording yields above 10 per cent.
Collinsville recorded yields of 13.42 per cent ($77,500) to secure the top spot in Queensland.
This was followed by Deagon, with yields of 13.31 per cent ($434,000), Cloncurry with 11.96 per cent ($150,000), and Dysart with 11.70 per cent ($80,000).
South Australia also saw four suburbs record yields of over 10 per cent.
Coober Pedy took the number one position in SA, recording yields of 12.63 per cent ($70,000).
Port Pirie West was next in line, with yields of 11.44 per cent ($100,000), followed by Peterborough with 11.02 per cent ($75,500) and Port Augusta with 10.40 per cent ($152,500).
To round off the list, New South Wales was the only other state in the country with suburbs to record yields of over 10 per cent.
Malua Bay, situated on the south coast of NSW, saw yields of 11.69 per cent ($445,000), while Broken Hill achieved yields of 11.11 per cent ($110,000).
While these suburbs achieved substantially high rental yields, Victor Kumar, property strategist and director of Right Property Group, doesn’t believe this alone makes for a good investment location.
“Whilst yields are good, you also want growth along with it, as well as liquidity, [which is] the get-out factor,” he said.
“Don't throw the investment rule book out just because you've got a high-yielding property on your plate. You need to stick to the fundamentals in the decision-making process.”
Highlighting the fact that most of the suburbs on the list are regional, Mr Kumar said a lot of these areas are largely dependent on just one main industry.
“Broken Hill, for example, is largely dependent on mining. I have got a couple of clients who, before they started using my services, had bought property there. They can't give it away at the moment because the mining has come down.”
Mr Kumar said that while the cash flow in these areas may be good in theory, there are a lot of additional expenses unique to remote locations.
“As they are well away from the main metropolitan centres, all of the maintenance is pretty much double what it would normally cost.
“I recently had to replace a stove in one of my properties [in Moree, NSW].
“If it was Sydney metro, an electric stove would cost me about $550 to $770 to replace. It cost me $1,500 to replace in Moree because there are probably only a few suppliers there, so the tradesmen charge what they want to charge, the electricians charge what they want to charge, because there isn't much competition for them.
“On paper, the yield works out really [well], but in reality, the yields are substantially lower.”