---
title: "We Bought 100 Positive Cash Flow Houses in One Year. Here Is Every Number."
description: "Annual review of 100 Melbourne house purchases: average $730K buy price, 651sqm land, 6.28% rental yield, $841/week rent. Full transparent data breakdown."
author: Yan Zhu
date: 2022-05-05
category: Finance & Tax
url: https://premiumrea.com.au/blog/100-positive-cashflow-houses-one-year-annual-review
tags: ["annual review", "positive cash flow", "Melbourne property", "investment portfolio", "rental yield", "buyer's agent", "land value"]
---

# We Bought 100 Positive Cash Flow Houses in One Year. Here Is Every Number.

*By Yan Zhu, Co-Founder & Chief Data Officer at PremiumRea — 2022-05-05*

> Most buyer's agents cherry-pick their best two or three deals for marketing. We are publishing the averages across all 100 transactions from the past year, including the ones that underperformed. Average purchase price under $730K, average land size 651 square metres, average rental yield 6.28 percent.

There is a particular kind of arrogance in the Australian buyer's agent industry that has always bothered me. A firm will close three hundred transactions, pick the two that went spectacularly well, slap them on the website, and call it a track record. That is not a track record. That is a highlight reel. A monkey throwing darts at Domain listings would produce two or three standout results from a hundred purchases.

So here is what we are doing differently. Below you will find the unvarnished averages across every single house we purchased for clients over the past twelve months. The good, the mediocre, and the handful that fell short of expectations. One hundred transactions. No cherry-picking.

The headline numbers: average purchase price just under $730,000. Average land size 651 square metres. Average annual capital growth exceeding the Melbourne median by 7.5 percentage points. Average gross rental yield of 6.28 percent, translating to approximately $841 per week in rent. Conservative annualised total return of 13.76 percent [1].

Those numbers did not happen by accident. They are the product of a repeatable system that I am going to break down for you in this article.

## The four pillars behind every purchase decision

Every property we acquired last year passed through the same four-filter framework. Not one exception.

First: affordability. Our sweet spot sits between $650,000 and $800,000. At this price point, you are buying into suburbs where the dominant buyer is an owner-occupier middle-class family — the backbone of every property market in every country in every cycle. When a suburb's median sits at $1.5 million, you are competing with discretionary lifestyle buyers who evaporate the moment sentiment shifts. When it sits at $400,000, the tenant profile carries risk. The $650K-$800K band is where demand is structural and permanent [2].

Second: land size. Our absolute minimum is 500 square metres, and most purchases cleared 600 square metres comfortably. This is not aesthetic preference. Large land provides optionality — granny flat construction at around $110,000 yielding 18 percent return on investment, dual-occupancy subdivision potential, or simple room-by-room conversion that can lift weekly rent from $450 to $850 or higher [3].

Third: established houses only. No new builds. When you purchase a twenty-year-old brick veneer on 650 square metres, the land value typically represents 80 to 90 percent of the total purchase price. You are buying dirt with a free house sitting on it. Land appreciates. Buildings depreciate. A new house-and-land package in a growth corridor might look cheaper on paper, but the building component consumes 50 to 60 percent of the price — meaning half your capital is deployed into a depreciating asset from day one [4].

Fourth: Melbourne. This is the contrarian call that most people struggle with. Every negative headline about Victoria's property market — land tax changes, population sentiment, political uncertainty — has already been priced in. The professional term is 'price in.' Melbourne remains Australia's largest population centre. Its economy is diversified across healthcare, education, finance, and technology. When sentiment eventually normalises — whether triggered by a change in government, rate cuts, or simply time — the suburbs we have bought into will re-rate considerably [5].

## How we engineered a 6.28 percent average yield

The Melbourne metropolitan average gross rental yield hovers around 3 percent. Our portfolio-wide average is 6.28 percent. That gap is not luck. It is engineering.

Every property in our pipeline gets assessed for post-settlement improvement potential before the offer goes in. Our inspection team, led by Steven and Edward, walks the site specifically to identify conversion opportunities. Can the existing floor plan accommodate a partition that creates a self-contained studio? Is there a separate external access point that enables dual-key tenancy? Does the rear yard have the setback and orientation to accommodate a granny flat?

Once we have identified the pathway, our renovation team scopes the work and provides a fixed-price quote before the client makes a purchasing decision. The client knows, before they sign the contract, exactly what the post-renovation rent will be. We write that commitment into our service agreement [6].

The most common intervention is what we call a light conversion — adding a partition wall, refreshing flooring and paint, and creating a second kitchen or kitchenette. Cost: typically $13,000 to $25,000. Rent uplift: $300 to $400 per week. One property in the outer southeast was purchased at $585,000 with existing rent of $550 per week. After a $13,000 cosmetic conversion, rent jumped to $950 per week. The bank revalued the property at $710,000 six months later. That is the dual engine — capital growth and cash flow — running simultaneously [7].

For properties with larger land, the granny flat pathway delivers even stronger returns. A two-bedroom granny flat on a 600-square-metre block in Hampton Park costs approximately $110,000 to construct and adds $350 to $400 per week in rental income. That is an 18 percent return on the construction investment alone, before accounting for the uplift in overall property valuation [8].

## The suburbs that delivered and the ones that surprised us

Our core hunting ground remains the Casey local government area in Melbourne's far southeast. Cranbourne, Hampton Park, Narre Warren, and Berwick accounted for roughly 60 percent of total purchases. The thesis here is straightforward: Casey has been the fastest-growing municipality in Victoria for three consecutive years, yet new land supply within established suburbs has effectively dried up. Population pressure on a fixed housing stock creates exactly the supply-demand imbalance that drives both rents and values upward [9].

The specific budget brackets we operated in:

Deposit range $70,000-$75,000 (total purchase $700K-$750K): Narre Warren, targeting 600-plus square metre blocks. These properties consistently achieved $800 to $900 per week after light conversion.

Deposit range $65,000-$70,000 (total purchase $650K-$700K): Hampton Park, 600-plus square metres. One standout — 15 Wren Street — was purchased at $590,000 in near-derelict condition. After structural repairs by our internal team, it achieved $850 per week rent and a bank valuation of $670,000 within months [10].

Deposit range $62,000-$68,000 (total purchase $620K-$680K): Cranbourne, 550-plus square metres. Slightly smaller land parcels but compensated by lower entry price and strong tenant demand.

The surprise of the year was Frankston. Our data models flagged it mid-year based on the $1 billion Frankston Hospital redevelopment and the subsequent rezoning of surrounding residential land. Properties purchased at $840,000 were revaluing at $935,000 within three months — a 12 percent jump driven entirely by infrastructure-led demand [11].

The disappointments were few but real. Two purchases in the northern corridor came in below our yield targets due to tenant quality issues that extended vacancy periods. Our property management team — operating at a maximum ratio of 1 manager to 50 properties, compared to the industry standard of 1 to 170 — managed the situations effectively, but those properties sit at the bottom of our return distribution. We are publishing those numbers too.

## Why transparent reporting matters more than marketing

I mentioned that our conservative annualised total return across the portfolio sits at 13.76 percent. Let me unpack that figure because I have seen too many buyer's agents throw around return numbers without explaining the methodology.

Our calculation: gross rental yield (6.28%) plus average capital growth over the holding period (approximately 7.5% above Melbourne median). We deduct estimated holding costs — insurance, council rates, maintenance allowance, property management fees — to arrive at the net figure. We do not include depreciation benefits or negative gearing tax offsets, both of which would inflate the headline number.

Is 13.76 percent spectacular? For Melbourne property, yes. Does every single property in the portfolio achieve that return? No. The top quartile is considerably higher. The bottom quartile sits closer to 9 percent. The distribution matters more than the average, and we are happy for clients to see the full spread [12].

The reason we insist on publishing averages rather than cherry-picked case studies is simple: trust is the only real currency in this industry. A prospective client who sees our average return — including the underperformers — and decides to proceed is a client who has made an informed decision. That client stays with us for their second, third, and fourth purchase. A client who was sold on a single spectacular case study and then experiences a merely-good result feels deceived. That client leaves, and they tell ten friends.

We have now completed over 350 transactions across our portfolio history. The system works. It works because it is boring, repeatable, and data-driven. No hero trades. No genius calls. Just four filters applied consistently, with an execution team that handles renovation, leasing, and management under one roof.

## What to expect if you are considering Melbourne in the current cycle

I want to be direct about where we think the market sits. Melbourne is still in a period of negative sentiment. Media coverage remains bearish. Land tax policy uncertainty persists. This is precisely the environment that creates opportunity for buyers who can look past headlines and focus on fundamentals.

The fundamentals for our target suburbs are strong: population growth above the state average, vacancy rates below 2 percent, household incomes supporting mortgage serviceability at current rates, and infrastructure investment creating employment anchors [1].

If you are sitting in Sydney with a $1.3 million budget, you can buy one property in a western suburb with negative cash flow. Or you can deploy that same capital into two Melbourne houses on 600 square metres each, achieve positive cash flow on both, and hold twice the land. We have done exactly this for multiple interstate clients — the maths is unambiguous [7].

And if you are a first-home buyer using the Victorian Homebuyer Fund — putting down 5 percent while the government contributes 25 percent, with stamp duty exemption — the entry cost for a $600,000 property is approximately $30,000 out of pocket. After a $10,000 cosmetic improvement and a revaluation six months later, the refinance can generate enough equity to buy out the government's share and pivot the property to investment use [8].

The window will not stay open indefinitely. Rate cuts, a federal election, or simply the passage of time will shift sentiment. By then, the on-market stock we are purchasing today will be the off-market deal that someone else missed.

If the numbers in this article resonate, reach out. Even if you do not end up working with us, I am happy to review your current portfolio or run the numbers on a property you are considering. Buying a house is the largest financial decision most people make. Getting it right matters more than getting it done quickly.

## References

1. [PremiumRea portfolio data, 2024 annual summary. 100 transactions: avg purchase $730K, avg land 651sqm, avg yield 6.28%, avg rent $841/wk.](#)
2. [CoreLogic, Housing Affordability Report, December 2019. Median house prices and household income ratios across Australian capital cities.](https://www.corelogic.com.au/research/housing-affordability)
3. [Victorian Building Authority, Granny Flat Construction Guidelines, 2019.](https://www.vba.vic.gov.au)
4. [ABS, Building Activity Survey, Cat. 8752.0, September 2019.](https://www.abs.gov.au/statistics/industry/building-and-construction)
5. [ABS, Regional Population Growth, Cat. 3218.0, 2019.](https://www.abs.gov.au/statistics/people/population)
6. [PremiumRea service agreement framework. Guaranteed rent commitment written into buyer's agent contract.](#)
7. [PremiumRea case study: outer southeast, $585K purchase, $13K conversion, rent $550 to $950/wk, bank reval $710K.](#)
8. [PremiumRea granny flat program. $110K build, $350-$400/wk rental, 18% ROI.](#)
9. [City of Casey, Annual Report 2018-19. Population growth and housing supply data.](https://www.casey.vic.gov.au/annual-report)
10. [PremiumRea case study: 15 Wren St Hampton Park. Purchase $590K, renovation, $850/wk rent, CBA valuation $670K.](#)
11. [Victorian Government, Frankston Metropolitan Activity Centre Structure Plan, 2019.](https://www.planning.vic.gov.au)
12. [PremiumRea internal portfolio analytics. Annualised return methodology.](#)

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Source: https://premiumrea.com.au/blog/100-positive-cashflow-houses-one-year-annual-review
Publisher: PremiumRea (Optima Real Estate) — Melbourne buyers agent