Sydney 2010 Landlord Guide: NSW Tenancy Laws 2026

Five Numbers Every Landlord Should Know

Most landlords know what their property earns. Fewer know whether it is earning what it should.

That distinction matters more than most people realise. A property in Surry Hills or Darlinghurst sitting at 3.8% gross yield when the suburb average is 4.4% is not a minor gap, over a ten-year hold period, it can represent tens of thousands of dollars in foregone income. And yet, many landlords carry that gap for years without realising it, because no one has sat down and shown them the numbers.

This article gives you a framework to evaluate your own property against real inner-Sydney benchmarks. Work through each of the five metrics below. If the numbers are not adding up, the final section explains what to do about it.

1. Gross rental yield

Gross rental yield is your annual rent expressed as a percentage of your property’s current market value. It is the most direct measure of how hard your asset is working.

Formula: (Annual rent ÷ Property value) × 100

For example, a unit renting at $800 per week ($41,600 per year) in a building where comparable units are worth $950,000 yields 4.38%.

Surry Hills units

4.4% gross yield

Benchmark — early 2026 (Cotality / YIP data)

Surry Hills houses

2.6% gross yield

Capital growth suburb — yield is compressed by price

The divergence between house and unit yields in Surry Hills is significant and worth understanding. Houses in the suburb are predominantly held for capital growth, the median house price has climbed to around $2.48 million, which mathematically compresses yield even at strong rents. Units present a different proposition: a price point closer to $895,000 with median weekly rents near $800 produces a yield that is genuinely competitive for inner-city Sydney.

If your property’s gross yield is more than 0.5 percentage points below the suburb benchmark, that is a signal worth investigating further.

2. Net rental yield (after management fees and outgoings)

Gross yield is a useful starting point, but it does not reflect what you actually keep. Net yield strips out the costs of ownership to show the real return on your investment.

Typical deductions to account for:

Property management fees (typically 5–8% of gross rent in inner Sydney)
Letting and lease renewal fees
Council rates, water rates, strata levies
Landlord insurance
Maintenance and repairs

On a well-managed inner-Sydney unit, these costs typically reduce gross yield by 1.5–2.0 percentage points. So a 4.4% gross yield becomes approximately 2.5–2.9% net, which, combined with inner Sydney’s capital growth history, is still a strong total return.

The ATO provides detailed guidance on what outgoings are deductible: ATO Rental Property Deductions Guide. If you are not claiming everything you are entitled to, you are effectively leaving money on the table.

Where net yield deteriorates beyond what the market warrants, management fees and vacancy costs are usually the first place to look.

3. Vacancy rate, yours vs the suburb average

Vacancy rate measures the proportion of time your property sits empty. Even short vacancies have a significant financial impact. A two-week vacancy on a property renting at $800 per week is $1,600 in lost income, before you factor in re-letting costs.

Surry Hills

0.78% vacancy

One of Sydney’s tightest rental markets

Sydney overall

~1.3% vacancy

City-wide average — early 2026 (SQM Research)

Surry Hills sits at approximately 0.78% vacancy, one of the lowest figures of any inner-city Sydney suburb. The structural reason is straightforward: 51% of Surry Hills residents rent, the suburb has strong employment proximity, and new rental supply is not keeping pace with demand. A well-managed property in this market should rarely sit empty between tenancies.

If your property experiences vacancy periods longer than two to three weeks when re-leasing, it warrants a conversation about pricing strategy, presentation, and how the property is being marketed. In a suburb where good properties are leased quickly, extended vacancy is almost always a management or pricing issue, not a market issue.

4. Days to lease, how long your property sits empty

Days to lease is the vacancy rate made tangible. It is the number of days between a tenancy ending and a new lease commencing. It captures the efficiency of your property manager’s leasing process, how quickly they list, how well they present the property, how effectively they qualify tenants, and how fast they convert inquiries into signed leases.

National median

17 days to lease

Australia-wide average, early 2026

Inner Sydney premium

Under 10 days

Well-presented, correctly priced properties

Nationally, rental properties lease within 17 days on average. In high-demand inner-city suburbs like Surry Hills, a well-presented and correctly priced property should lease considerably faster. If your property is consistently taking three to four weeks to secure a new tenant, the issue is likely one of three things: it is overpriced for current market conditions, it is not being presented compellingly in marketing materials, or inquiries are not being followed up promptly enough.

Ask your property manager for your property’s average days-to-lease history. Compare it against what they are achieving across their portfolio.

5. Rent achieved vs market rent

This is the metric landlords most frequently overlook, and the one that most directly affects returns. Market rent is what an equivalent property in your suburb is letting for today. If your property is tenanted below market rate, you may be leaving $50, $100, or more per week unclaimed.

There are two common reasons this happens. First, long-term tenancies where rent increases have not kept pace with the market. Under NSW tenancy legislation, rent increases require proper notice and cannot be applied more than once in a twelve-month period, but they can and should be applied each year when market conditions justify it. Second, a property manager who sets the initial rent conservatively to achieve a quick let, then never revisits it.

Surry Hills units

$800 pw median rent

YIP / Cotality data, early 2026

Premium stock

$950–$1,100+ pw

Renovated, well-located, large format units

At the current Surry Hills median of around $800 per week for units, a property being leased at $730 per week, not uncommon in a long-running tenancy, represents a $70 per week shortfall. That is $3,640 per year in foregone income, or approximately one full month’s rent. Over a three-year tenancy, it compounds to over $10,000.

A current rental appraisal, not one from two years ago, is the only reliable way to know where your rent sits relative to the market.

What to do if the numbers are not adding up

If you have worked through these five metrics and identified one or more gaps, the good news is that underperformance at the management level is correctable. Unlike a structural issue with the property or a broader market downturn, a below-market rent, an extended vacancy, or excessive outgoings can be addressed relatively quickly with the right management in place.

The most productive starting point is a current, independent rental appraisal. Not a number your current manager provides in a renewal letter, a proper market analysis that benchmarks your property against comparable lettings in the suburb right now.

For landlords in Surry Hills: property-managers-in-surry-hills | For landlords in Darlinghurst: property-managers-darlinghurst

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See exactly how your property compares to current market benchmarks in Surry Hills and Darlinghurst, rent achieved, vacancy, days to lease, and yield. No obligation.

→ Book your free rental appraisal at murrayproperty.com.au/rental-appraisal/