Clearly, there are quite a few people who own a rental property, or who are considering taking that step, who are interested in hearing first-hand tips from people who are actively involved in the day-to-day activities of the Melbourne rental market! It was great to receive so much positive feedback on the information we had in last week’s advice on STARTING YOUR INVESTMENT JOURNEY ON THE RIGHT FOOT.

With this in mind, I thought I should follow up with another topic that also gets overlooked by many investors, and that’s how to measure the performance of your property investment.

It’s amazing how many investors we speak to on a regular basis who not only don’t know what rate of return their rental income is providing, but also what rate of capital growth their property has achieved since they purchased it.

So here’s a tip…yes, your rate of rental return is important, and a majority of rental property owners can give you a rough idea of what that rate of annual return they are getting as a percentage of their total investment. However, that rate is usually the smallest proportion of their overall returns.

Not surprisingly given the enormous rate of growth the market has seen in recent years, the largest part of a property investor’s return in recent years has been the capital growth, i.e. how much the value of the property has increased over time.

Now one indicator of capital growth that some investors use is the median price of a house or unit in Melbourne. However, this is a very general measurement. Others may rely on the median price of a house or unit in their specific suburb. This is more targeted, but still more of an indication of trends rather than specific values, as it doesn’t take into consideration the individual features and location of your property.

To be more certain of how your rental property has performed as an investment, why not consider asking your Property Manager to arrange an individual assessment from an experienced sales agent who can inspect the property and provide an up-to-date comparative analysis of recent sales of similar properties in the area.

I know of property investors who have one of these done every few years to ensure they stay up to date with the local market, so if you would like one of our team at Barry Plant Thomastown to provide this information for you, don’t hesitate to give us a call this week on 9466 3233.

We’d be more than happy to provide this service without costs or obligation.

Cheers,

Con Constantinou

Barry Plant Thomastown