How does a rental yield of more than 10% sound? This Momentum Wealth client said he was “shocked” following such strong demand for his Perth property.
Last year Momentum Wealth client Adam decided to take advantage of what’s known as a dual-income strategy, and the decision has paid off.
At the time, the fly-in fly-out worker wanted to purchase another investment property to grow his portfolio but didn’t have enough borrowing capacity.
Instead, he decided to build an ancillary dwelling on the back of his existing investment property, which would cost a fraction of the price.
Recent changes to planning and development legislation in Western Australia mean ancillary dwellings, more affectionately known as granny flats, can now be leased separate to the main residence.
By building an ancillary dwelling, you’ll receive two rental incomes from one investment property, hence the name dual-income strategy.
After engaging Momentum Wealth’s planning and developments division, a two bedroom, one bathroom ancillary dwelling was designed that would fit in with the existing investment property, located in Forrestfield.
Following the recent completion of the ancillary dwelling, Momentum Wealth’s planning and developments division officially handed the keys to Adam.
The completed turnkey solutions come ready for tenants to move in and include a premium-brand air conditioner, stainless-steel dishwasher, fully painted internally and externally and 2.7 metre (31 course) high and raked ceilings.
When it came time to leasing the ancillary dwelling, Momentum Wealth’s property management team received very strong demand.
In the first and only viewing, fifteen groups attended the home open and seven applications were received.
“I was shocked that it had such a big turnout and the applicants were quite diverse, so I had a lot to choose from,” Adam said.
After thorough consideration, the ancillary dwelling was leased to a single male for $300 per week, which represents a rental yield of 10.75% on the cost of the ancillary accommodation.
Including the main residence, which is rented for $400 per week, the property’s total rental yield stands at 6.3%.
“It’s definitely a good return,” Adam said. “If I could find the right property I would definitely do it again.”