Rents have risen almost 12% in the past 12 months and the vacancy rate stands at an incredible 1%, according to new data from SQM Research. 

These factors, combined with subdued pricing as our interest rates move north, may make property investment an attractive proposition for some buyers.

REA Group's PropTrack rental report suggests new rental listings have fallen 12.2% to their lowest point in almost a decade.

One reason has been an exodus of investors who sold properties to capitalise on the record-high property prices of the past 18 months. REA believes these properties were snapped up by owner-occupiers, thus being removed from the rental pool and adding to the shortage of accommodation for lease.

Figures from the Urban Development Institute of Australia also highlight possible opportunities for investors. Recent UDIA modelling showed that 75% of young Australians would be life-long renters simply because property prices were now beyond their reach.

If you are looking to invest in property, make sure you are well prepared:

Seek professional advice

If you're not an expert in property investment, you should seek advice from an accountant or licensed financial adviser. 

Goal-setting

Establish your financial goals before making a purchase. 

Research

Don't go blindly into the property market. When considering a property, think about the type of tenant it will attract. Young renters tend to gravitate to areas with cafes, restaurants and other entertainment facilities. Families generally prefer a more suburban existence with lots of room for the kids.

Yield equation

A benchmark annual yield from a property is around 5-6% of its value. The price growth of the past 18 months has made this difficult to achieve. However, the higher rents being asked will play in your favour now. Discuss this issue with your financial adviser or accountant.

Negative gearing

Seek advice on whether negative gearing is a good option in your circumstances. Setting a loss from your investment property against your taxable income sounds great, but you could be better off making a profit.

NOTE: The information in this article is general in nature and provided as a general overview  only. Always consult your financial advisor or accountant for advice specific to your personal circumstances.