Rental properties in Kaitaia and Kaikohe are the jewels in the crown for investors as both areas are yielding the highest annual returns of all places in Northland, latest figures show.
Data by analysts OneRoof-Valocity shows the annual rental return in Kaitaia on a median estimated weekly rent of $464 is nearly 10 per cent while a $339 rental property in Kaikohe will earn investors just over 8 per cent.
The rental returns are based on the median houses price of $230,000 in Kaitaia and $190,000 in Kaikohe.
Even rental properties in Ahipara, with a median house price is $340,000, is getting a 6 per cent return.
The stats are based on 48 weeks' rental income and leaving four weeks aside as a buffer for expenses.
Tiny Te Teko, about 20km from Whakatāne with a population of 500 and the median house price of $120,000, is the best in the country for rental returns. The estimated weekly rent at $473 is giving investors a 19 per cent return.
Kaitaia-based financial mentor Tania Sneddon is hunting for a rental property and knows she'll have to fork out at least $100 more than the $250 she's currently paying for a three-bedroom house at Ahipara.
The working solo mum is planning on putting a notice on shop windows in central Kaitaia seeking a house to rent as the demand for rental properties is at an all-time high.
"It's quite daunting. I am worried I may not be able to find something suitable. People I know in Kaitaia are paying $250 a week in sub-standard houses with a shared kitchen.
"I'd prefer the same area but my second option is Kaitaia and I've already spoken to my two kids about the positives of living in Kaitaia. My son is paying to board with me but I know he can't afford more," she said.
Sneddon said people returning home from larger centres such as Auckland were contributing to a shortage of rental accommodation in Kaitaia.
Chairman of Kaikohe Business Association Mike Kanji said a combination of industrial development and out-of-towners buying investment properties have led to a shortage of rentals.
"There's still an opportunity for renters to buy and a lot of that is around educating and showing them how they can own their own homes instead of renting."
Kanji said a lot of empty shops were starting to get leased and together with a few new businesses, they were all doing well.
His predecessor Mark Anderson said places such as Kaikohe have ended up with a large renting population because investors were looking for cheaper properties outside the main centres.
"People start by buying in bigger centres where it's safer as property values increase, then they look further afield. From Auckland to Warkworth, they then move to Whangārei and now Kaikohe.
"There's a bit of a swing back to the owner/occupier trend where people are getting squeezed in other areas due to pricing pressure."
Anderson said initially, houses for rent were so cheap and guaranteed in Kaikohe but the rental market was far more heated these days.
Deb Wilson of Ray White in Kaikohe said between 15 and 20 people enquired daily about rental properties, on top of a big waiting list.
"There's nothing for rent, there's nothing for sale. It's quite a vicious cycle. People are moving back home from Auckland, Christchurch, Australia and a lot are owner/occupier properties that were previously rented."
Wilson said rentals have gone up a third or even higher than what prices were in Kaikohe a year ago.
She said next to no development in Kaikohe over the past two decades also contributed to a housing shortage.
In Kaipara, the rental return in Dargaville based on a weekly rent of $357 is the highest in the district at 5.4 per cent.
At 5.6 per cent, houses in Raumanga are fetching the highest returns in Whangārei followed by Portland at 5.4 per cent, Tikipunga 5.15 per cent, and Morningside 5.11 perc ent.
However, the highest median estimated weekly rental in Northland is $610 in Matapouri.
The median house prices is $430,000 in the Far North, $515,000 in Kaipara and $510,000 in Whangārei.
Best annual returns on rental properties in Northland
* Kaitaia— 9.68 per cent
* Kaikohe— 8.56 per cent
* Raumanga— 5.64 per cent
* Portland— 5.46 per cent
* Horahora— 5.17 per cent