Before you buy a residential investment property part of your research should always be in considering who is going to rent your new investment property. If you match the property to the target tenants you’re less likely to have vacancies or need to discount the rent to get someone in. Ask yourself, who is the most likely type of tenant to rent properties in this area, what features do they want and how much can they afford to pay? Do they require parking or not?
For example if the area is popular with young families, a three or four bedroom house in a quiet street close to the local school, shops and transport would be a wise purchase. Or if you are considering a property for busy professionals a townhouse or villa would be more suitable as maintenance of lawns and gardens would be looked after by body corporates. Most tenants unfortunately do not treat a rental property as well as they would their own home so buying a new pristine property with highly polished floors and expensive fittings may become damaged over time and therefore the premium you paid will be quickly eroded.
In the Southern Highlands, real estate for renters is at a premium so you will not be competing with many other land-lords and therefore a cottage in good condition will be quickly rented at a high yield usually at 6% or better.