High-Yield Property Shares Compared to the Australian Average
Looking at Rental Yields in Context
Across Australia, many residential properties generate relatively modest rental income once ongoing costs such as property management, maintenance, insurance, and council rates are taken into account. Industry commentary often places net residential rental yields in the range of approximately 1% to 4%, depending on location and property type.
Some Tenants In Common property share structures are designed differently. In certain cases, these structures have historically been associated with higher net rental yields, sometimes reported in the range of approximately 6.5% to 8.5%. This article explains, at a general level, how those differences can arise.
This content is general information only. It is not financial advice.
An Illustrative Comparison
To understand the scale of difference that can exist between property structures, it can be helpful to look at simplified examples.
Typical residential net yield: around 2.5% per year
Some Tenants In Common property share examples: approximately 6.5%–8.5% per year
Using a $60,000 ownership interest for illustration only:
At a 2.5% net yield, annual rental income would be approximately $1,500
At a 6.5% net yield, annual rental income would be approximately $3,900
At an 8.5% net yield, annual rental income would be approximately $5,100
These figures are illustrative only. They are not forecasts, guarantees, or promises of future performance.
Why Some Properties Are Associated With Higher Yields
Where higher net yields have been reported, they are typically linked to structural and operational factors rather than short-term market movements. These may include:
Property selection criteria
Focus on locations and property types with consistent rental demand.Income-oriented design
Properties configured with rental efficiency in mind rather than owner-occupier preferences.Professional management
Ongoing management intended to maintain occupancy levels and manage operating costs effectively.
Actual rental outcomes vary and depend on market conditions, tenant demand, and management performance.
Property Shares and Value Changes
In a Tenants In Common structure, ownership is recorded as a defined percentage of the property title. Any change in the property’s market value is reflected proportionally in the value of that ownership interest.
Property values can rise or fall. Capital growth is not guaranteed.
A Hands-Off Ownership Structure
At a structural level, property share arrangements commonly involve:
A registered ownership interest recorded on the property title
Professional property and tenancy management
Rental income distributed proportionally to owners
No direct involvement by owners in day-to-day property operations
BuildBright Property’s role is to provide general information about how these structures work and to connect individuals with appropriate licensed professionals. We do not provide financial, legal, or tax advice.
Final Note
Property share structures are one of several ways residential property can be held and managed. Understanding how yield, ownership, and management interact can help individuals have more informed discussions with licensed advisers.
Important Disclaimer
This article provides general information only and does not constitute financial, legal, or tax advice. BuildBright Property does not guarantee any investment outcome. Independent professional advice should be obtained before making any investment or SMSF-related decisions.