Strong demand for rentals entices investors back into market

RENTAL properties are paying off for investors with rental yields rising over the last 12 months, particularly in resource-rich areas.

More than 150 Queensland postcodes have recorded rental yields of 5% or more, according to analysis by the Real Estate Institute of Queensland.

Chief executive officer Anton Kardash said strong demand for rental properties had attracted investors back to the property market.

"Our property market has turned a corner over the past six months, and these robust yields reflect that sales prices had yet to fully rebound in the December quarter last year but rents had definitely increased," Mr Kardash said.

"REIQ analysis of Australian Bureau of Statistics housing finance data found that the number of investors in the Queensland property market in February had increased more than 10% compared to January this year."

Miles recorded the highest rental yield in the state at 9.3% while Mt Morgan, south of Rockhampton, recorded 8.7%.

For units and townhouses, Chinchilla led the way with 8.2%.

The REIQ gross rental yields use weighted median rents and sale prices to derive yields, which is the annual income earned from a tenanted property divided by the purchase price.

They do not take into account costs associated with the original purchase or the ongoing costs of owning an investment property.

"Our gross rental yields are also classed as short-term yields as they reflect current pricings," Mr Kardash said.

"However, if you hold your investment property over the long-term - which of course is always advisable - then the yield improves given rental income has increased but your original purchase price had stayed the same."