How to Increase Rental Yield on Your Investment Property

For new and existing investors, rental yield remains a key metric to improve the return on their investment. In this blog, we’ll unpack what rental yield really means and the strategies you can use to maximise your investment’s potential in the ACT. Whether you’re a first-time investor or already own real estate in Canberra , understanding each suburb can help you make the most of your investment.

The Canberra Market 

Canberra’s rental market remains resilient, making it attractive to investors who want consistent returns. Houses and apartments for rent in Canberra historically have low vacancies. With a diverse tenant base — families, professionals, and students  — there is sustained high demand. This gives confidence to new and existing investors, despite rising costs, like the land tax. 

What is Rental Yield? 

Rental yield measures the return on your property investment based on the rental income that is generated. There are two kinds of rental yield: 

• Gross rental yield is the gross amount of rental income generated. 
• Nett rental yield accounts for expenses like maintenance and management fees.

How to Calculate Rental Yield?  

This calculation helps you do a quick comparison between potential investment properties and identify which option will deliver the best return on investment.

What is a Good Rental Yield? 

A “good” rental yield depends on the property type, location, and tenant profile, but generally, around 4-4.5% is considered strong in Canberra. Some high rental yield suburbs in Canberra may deliver better returns, but sustaining them long-term may be difficult. A modern apartment near the city may generate steady returns, while a family home in the suburbs could offer more long-term stability.

What is the Difference Between Rental Yield and Capital Growth? 

It’s easy to confuse rental yield and capital growth, but they serve different purposes. Rental yield refers to the income you receive now from rent, while capital growth reflects the long-term increase in property value. 

How to Improve Your Rental Yield? 

Before Investing 

• Planning is everything. Start by understanding your borrowing power and what kind of property fits your budget. 
• Consider the location carefully: who is most likely to live there? Students, families, or professionals? Match your property type and rental price to your ideal tenant. 
• Newer builds require fewer repairs and are attractive to tenants seeking modern living, making them a smart long-term choice.

Maximising Your Rental Yield After You’ve Purchased the Property 

• Once you own the property, focus on strategies that keep tenants happy and maximise returns without overspending. Rather than ignoring minor problems until you need major renovations, invest in small upgrades and proactive maintenance. A fresh coat of paint and regular servicing of appliances can make your property more appealing.
• Storage will always be an important aspect that tenants consider when inspecting properties. Add functional storage that would make living in the house easier without overcrowding the space. 
• Instead of deciding on a rental amount yourself, get a professional market analysis. An expert assessment can help you understand how to price competitively while keeping your yield strong.
• Tenant quality matters, too. Attracting long-term, reliable tenants often means offering fair rent rather than overpricing. This provides consistent income and reduces costly vacancy periods.
• Professional support can also make a big difference. A property manager brings expertise in your particular suburb, tenant selection, lease management, and ongoing maintenance, giving you peace of mind while maximising returns. Independent offers Canberra property management services tailored to local investors, ensuring your property stays competitive in today’s rental market.

High Rental Yield Suburbs in Canberra 

Canberra’s rental market offers strong yields across many suburbs if the property type aligns with tenant demand. Houses in the outer suburbs are popular among growing families who need more space. Inner North and areas close to the hospital and the business district work well for professionals, government employees or contractors. 

Here are some examples of how yields can be maximised:

• Turner & Braddon: Low-maintenance apartments suit students studying at ANU.
• Weston Creek & Belconnen : Larger family homes near schools and parks are highly sought after.
• Phillip: Apartments attract healthcare professionals due to proximity to Canberra Hospital.
• Kingston: Modern, low-maintenance apartments are preferred by professionals wanting a vibrant community with many amenities close by.
• Molonglo Valley : Family homes are popular due to the schools in the area. 

Common Mistakes that can take your Rental Yield Down 

Even in a strong market, simple oversights can reduce the long-term return on your investment. Being proactive and realistic about these factors helps protect your yield:

• Keeping a buffer for hidden costs, such as repairs or insurance.
• Budgeting for vacancy periods that may cut into returns.
• Accounting for tax obligations or financial implications.
• Staying ahead of rental market shifts by having a strong grasp on the market.

Conclusion 

Canberra’s rental market continues to offer reliable opportunities for investors, with a diverse tenant base and consistent demand that supports strong yields. By balancing rental yield with long-term growth and matching the right property to the right tenant profile, you can maximise both your short-term returns and long-term investment stability.

To make sure you’re taking the right steps, Independent Property Group can offer professional advice. Our deep knowledge of Canberra’s diverse suburbs and expertise in property management can support you while you build a long-term rental income. Contact us for an appraisal of your property today!