Area with high % renters

[jezza]

Just after some guidence from experienced investers whether they target areas where there is a high percentage of Renter ( greater than 45%) or those areas with low percentage of renters ( less than 15%). Or does this information even factor into there equation. What are the pros and cons they see with places with a high volume of renter.
ta
Jerome

 

[BV]

IMO it would be better to invest in areas with higher % of owner occupiers
because the rent should be higher and you should be able to get better calibre tenants.
This is not guaranteed though, and there is no guarantee of better capital gains either.

 

[AndrewT]

I'm not an experienced investor but I would agree with BV. If you plan on a buy & hold and having a tenant in the IP then one would assume a area with high % renters would mean you can get quality tenants and less chance of vacany.

I was just looking at Fairfields statistics actually and they have 50% renters and their vacany rates are around the 1.5%. Where as in a place like Camden, 32% are renters and vacancy rates are up around 4.5%.

 

[buzzlightyear]

To be honest, the % of OO v renters in an area is well down on this list of criteria or factors that I would use in determining where to invest. (In fact it is not to be honest). I really challenge whether that number tells you anything at all.

It might be far more useful if you had that figure for property type and price range for a specific postcode to provide anything more insightful.

 

[DavidMc]

I know some people prefer areas with a high % of OO's as they are more likely to upgrade and invest money in improving their home (and therefore the average price of the area).

 

[Wolfgang]

Monique Wakelin always says to avoid streets with lots of apartments but she also recommends suburbs with high numbers of renters such as Elwood, Flemington.

 

[marg4000]

Just remember that areas can change quite rapidly.

We have lived in our PPOR for 30 years, at one stage our 8 closest neighbours were all renters, now all are owner occupiers.
Marg

 

[casper007]

The main advantage with areas with high OO is that they are less likely to up and sell their family home if things get tough.

Also ... other OO's tend to like living in these suburbs so when it is time to sell your IP... you are more likely to find a OO who emotionally buys it as opposed to an investor who only looks at the numbers

I agree suburbs change ... but IMO not that dramatically

Good Luck

 

[gwk]

There are some real rental slum areas in Australia.. I would have thought staying clear of them could be beneficial for long-term growth. Most renters really don't care too much about the outside appearance of their properties, and there is a lot of coming and going all the time. If you've got a lot of these in one area, the impression of the whole area suffers.

There are some areas I probably would not live, simply as there are too many renters there.. it often doesn't make for a good neighbourhood feel.