Strong rents throughout Australia mean there are plenty of locations returning extremely high rental yields, but investors need to be wary of selecting a location based on yield alone.

New analysis by Savings.com of the top 100 Australian suburbs and towns with the highest rental yields shows there are 18 locations with house rental yields of 10% or more and 15 unit market. While the yields may be strong, Hotspotting managing director Terry Ryder warns many of the markets are high-risk locations as they may be very remote, the economy is driven by only one industry and the chance of any significant future capital growth is unlikely.

A good example of this is the highest house rental yield in Australia is 19.4% in Lightning Ridge in New South Wales and 17.3% in Coolgardie in Western Australia.

Within the unit market there are more locations within capital city markets which are more likely to offer investors both high yields and future capital growth. There are 17 suburbs from Darwin, 12 from Perth, six from Melbourne, two from Brisbane and one each from Adelaide and Canberra in the top 100 unit markets.

The best performing capital city unit market was in Brassall in Ipswich within Greater Brisbane with a yield of 11.4%.