Big rental deals if you know where Eastbrook Links Estate at Muswellbrook in the Upper Hunter Valley of NSW...in high demand. SYDNEYSIDERS looking to start up or expand a property portfolio without dishing out millions of dollars may be surprised to know there are houses well under the $300,000 mark commanding healthy rents. Regional real estate agents across NSW are reporting that there is an uptake in Sydney investors looking outside the metropolitan square for attractive rental yields. "With an average sale price nudging $600,000 across Sydney, it is little wonder that investors are being lured by properties in regional NSW," says Angus Raine, CEO of Raine & Horne. "As a consequence, towns such as Tamworth, Bathurst, Newcastle, Albury-Wodonga, Wollongong and Nelson Bay are squarely in the sights of investors where healthy yields in excess of 6 per cent and some capital growth are possible," he says. Recent data from Residex shows median house prices in regional NSW grew by an annual average of 6.17 per cent over the 10 years to February 2012 while the median regional apartment price increased by an annual average of 6.26 per cent. "Smart investors are looking at regional centres that have increasing populations as a result of Australia's growing education and tourism sectors, or towns that are enjoying the spin-offs from the mining boom," Raine says. Josh Kersten, co-principal of Raine & Horne Wollongong says some Sydney investors are buying up multiple units and blocks. "We recently sold four apartments in the same block at 19 Railway Cres, North Wollongong, to a Sydney-based property syndicate for $830,000," Kersten says. Each property is currently leased for between $275 and $280 a week, generating a gross rental return of more than 7 per cent each for the syndicate. Vacancy rates in Wollongong are currently sitting below 1 per cent, which has fuelled an attractive environment for strong rental returns which, in turn, entices investors. The University of Wollongong, which is ranked in Australia's 10 best universities and is in the top 2 per cent of universities globally, has attracted cashed up international and interstate students to the city, nearly all of them renters, who are willing to pay top dollar just to secure accommodation. Another university town, Bathurst, has also experienced a boost in investor interest. According to John Fagan, co-principal at Raine & Horne Bathurst, the number of homes sold to investors "sight unseen" has doubled in the past 12 months. "Bathurst is a strong regional city with affordable real estate," Fagan says. "Apart from healthy investment yields, the majority of interstate investors are also attracted by Bathurst's steady population growth, good climate and an excellent location that is just three hours by car from Sydney," he says. Fagan says before buying an investment property sight unseen, however, purchasers should always obtain pest and building inspections as well as check with local property managers to confirm the rental value and return estimates are not over-inflated. He also urges out-of-town investors to check with the local police on the safety of a neighbourhood. "The council can also help investors with the demographics of the city," he says. As with many other towns across Australia, NSW has its areas benefiting from booming primary industry. In Muswellbrook, the momentum from Sydney investors is building, especially for furnished properties. "We recently secured tenants in a four-bedroom fully furnished house for $1000 a week," says Kevin Timpson, co-principal of LJ Hooker in Muswellbrook, adding that landlords can demand an extra $400 to $500 a week for furnished properties because the trend towards contractor tenants is driving up prices. "We have over 550 rental properties on our books with a vacancy rate consistently under 1 per cent," he says. It is not surprising that we have witnessed a spike in demand for fully furnished properties. Rio Tinto, Xstrata and BHP are all expanding or starting new mines in the area this year. Hundreds of workers are coming into town looking for accommodation. As a result, towns such as Muswellbrook are growing. Sydney house-hunters have generated a significant amount of the inquiry this year and purchased numerous properties. The consistent capital growth, high rental returns, low vacancy rates and stability of the area for long-term investment are capturing their attention in Muswellbrook," Frank Maclean, sales agent for Eastbrook Links Estate in Muswellbrook, says. The township keeps expanding exponentially and this is set to continue. I have a very long list of buyers ready to snare a land parcel in Eastbrook Links Estate when more land is made available.