When investing in residential property one of the key factors to consider is your net return on monies invested. This will be an indicator on whether or not to proceed.
To assess the net return you will have to compare it with the average returns for similar properties. Too low a return may mean that alternative investments should be reviewed, while a very high relative yield may mean there is an accompanying risk factor that is higher than normal.

Please remember areas that produce lower yields predominately have a higher capital gain and at the end of the day that is what it’s about for most people when investing in property.

The yield is calculated by starting with the purchase price. This is the denominator. The numerator is your net yearly income.

To figure out the net income you take your yearly gross rent and subtract your outgoings. Outgoings for residential properties include your management fees paid to the letting agent, council and water rates for the year, estimated repairs, maintanence and strata levies and land tax if applicable.

You should set aside a yearly amount for repairs and maintenance, since big expenses occur periodically and not necessarily yearly.
When investing in property plan to hold the property a minimum of five years.

This accounts for economic cycles and changing conditions.
if you are not sure about how much to pay for a property, or if you should purchase before auction or just any general questions in regards to purchasing, please do not hesitate to give me a call direct for some independent advice.