Do Bogans Rent?

[dreims]

Over on the Melton thread Peter raised an interesting idea in terms of why frankston and melton are a good investment, - Bogans rent, ex yuppies buy.

but looking at the stats I'm not so sure about this

Melton has only 15% of its population renting with the majority owning or buying, Frankston 23% similuar story

On the other hand brunswick, footscray 40%

richmond collingwood, fitzroy, and carlton well and truley the majority people living there are renters. Carlton is at 71% rental.

This is sourced from domain.com.au

braybrook, has a pretty high level of renters too, what does everyone think of braybrook, too ghetto?

My worries about melton frankston and surrounds is that while on selling property won't be hard, finding tenants could be, what has everyone's experiences been like?

Yes ex yuppies buy boutique but Bogans buy too.

Yuppies rent, ex uni students who finally have a good high paying job, no kids to worries about and who want to be in the action and dont even know if they want to stay in Australia.

And people who can't get a homeloan rent (students, low income earners etc).

Now I'm pretty green at all this but wouldn't it be safer to buy in a place where there is a high demand for rental properties instead of a place where while yes property prices may improve most people living there will be buying homes not renting?

Or have I missed the point, is it actually easier to find tennants for rental properties in areas like frankston, melton etc because most people own and live in there own places and there arent many rental properties to chose from?

 

[Peter Parker]

Over on the Melton thread Peter raised an interesting idea in terms of why frankston and melton are a good investment, - Bogans rent, ex yuppies buy.

but looking at the stats I'm not so sure about this

Melton has only 15% of its population renting with the majority owning or buying,

I suspect you will find big differences, depending on which parts of Melton. Eg newer outer parts would be all buyers with new project homes. Older areas eg Melton South would be more your housing commission or low income renters. Plus Melton's mostly detached houses which correlates with more families and owner occupiers.

richmond collingwood, fitzroy, and carlton well and truley the majority people living there are renters. Carlton is at 71% rental.

Heaps of units which in most (not all) cases correlates with heaps of renters. Include housing commission and newer units full of overseas students.

Now I'm pretty green at all this but wouldn't it be safer to buy in a place where there is a high demand for rental properties instead of a place where while yes property prices may improve most people living there will be buying homes not renting?

Or have I missed the point, is it actually easier to find tennants for rental properties in areas like frankston, melton etc because most people own and live in there own places and there arent many rental properties to chose from?

Either could be correct. But note that higher owner ratios generally mean a more stable population and owners adding value to their houses, resulting in growth opportunities for you, the investor as the housing stock in the area improves.

In suburbs full of renters houses are often pretty basic with few improvements. And if you as a landlord were to make improvements the extra rent you'd get might be only $10-20pw and the increase in value only $10k - maybe not worth it.

But in a more owner-occupied area the same amount of improvements might add $20-30k to the house value so they're going to be more worthwhile.

Peter

 

[myoung]

I have 2 in Melton and 1 in frankston. No issues finding tenants at all.

A small percentage of renters is not necessarily a bad thing. It actually bodes well for a suburb that will gentrify more rapidly due to pride in home ownership and improvements made by owner occupiers, less transient population etc IMHO

 

[bindertoo]

Yes we do rent, preferably to yuppies.

 

[Ajax]

Some rent...some own

http://www.realestate.com.au/cgi-bi...r=&cc=&c=11578823&s=nsw&snf=rbs&tm=1229578151

http://www.realestate.com.au/cgi-bi...r=&cc=&c=11578823&s=nsw&snf=rbs&tm=1229578151

 

[Southsider]

Some rent...some own

I have observed over years gone by how rental properties have increased in
inner Melbourne suburbs, way above the melbourne average of 24%.

for example :-
Elwood 49% rent
St Kilda 57%
Richmond 49%
Hawthorn 45%
Clifton Hill 45%
Elstenwick 34%
Port Melbourne 41%
South Yarra 56%
Footscray 40%

I believe (but stand to be corrected) Dandenong at 33% renters is the
highest in outer Melbourne.

There are bogans in all suburbs, all levels of socio economics.
SS

 

[exstatic]

Question is, do you want 'bogans' renting your property, often possible a lower level of respect for the property, possibly problems with rental payments etc..

I with yuppie renters

 

[BoatBoy]

Question is, do you want 'bogans' renting your property, often possible a lower level of respect for the property, possibly problems with rental payments etc..

I with yuppie renters

Nice generalisation Brendan

Some of the most diligent tenants get their guaranteed rental payments from the government and have great respect for property that they cant own themselves. Have had a few, money always paid

Plenty of yuppies on good money don't pay their rent and find better things to spend the money on and have no respect for property as money doesn't mean as much. Have one now, done a runner owing money, hasn't dropped keys back, so we apparently cant take possession to show prospective tenants through, who are waiting.

Dave

 

[james_w]

Yes we do rent, preferably to yuppies.

lol my thoughts exactly I wear black drive a v8 and have tatts and rent to tenants that would probably call us bogans

 

[exstatic]

Nice generalisation Brendan

Some of the most diligent tenants get their guaranteed rental payments from the government and have great respect for property that they cant own themselves. Have had a few, money always paid

Plenty of yuppies on good money don't pay their rent and find better things to spend the money on and have no respect for property as money doesn't mean as much. Have one now, done a runner owing money, hasn't dropped keys back, so we apparently cant take possession to show prospective tenants through, who are waiting.

Dave

BoatBoy,

Yes it was a huge generalisation, however it is warranted as I lived in Melton for over 20 years and a lot of people I knew were renters and I saw first hand the level of 'respect' they had for where they lived.

In saying that, my parents rented and treated the home as thier own, in fact ended up buying it off the landlord!

So I guess the more I think about it, it really is a mixed bag, you can have good and bad tenants no matter what.

 

[MC1]

Yes we do rent, preferably to yuppies.

lol quality

 

[Ajax]

A highly paid professional could have a cocaine or heroin addiction...and be unwilling to pay for anything other than the next line or hit.

Have seen this before with a foreign exchange dealer as a client...despite the $250k+ salary couldn't/wouldn't pay their bills preferring to shoot up after work.

 

[BayView]

Now I'm pretty green at all this but wouldn't it be safer to buy in a place where there is a high demand for rental properties instead of a place where while yes property prices may improve most people living there will be buying homes not renting?

Or have I missed the point, is it actually easier to find tennants for rental properties in areas like frankston, melton etc because most people own and live in there own places and there arent many rental properties to chose from?

You're on the right track; in both Jan's books and Marg Lomas' books they both talk about selection criteria for an IP.

One of those criteria is to buy in a high rent demand area. Why? because there will be more chances of renting your IP when it becomes vacant, and higher rent demand keeps the rents up.

Marg Lomas specifically mentions buying IP's in the 1/3 price range, and/or below the median for the area. Same reason; more renters (and buyers).

You may get more cap gain in a suburb like Kew, or Brighton, but it may be tough to keep finding tenants when the rent is at the top end of the affordability scale.

Conversely, you can still get good cap gain from the cheaper areas and cop your solid rent as well.

To answer your original question; boguns both rent and buy. Often they buy before the yuppies because their expectations and self-image are different, and boguns are often tradies who earn a good quid.

The bogan has no aspirations to live in somewhere like Chapel st South Yarra, and can't stand the type of people who do live there, so they are more likely to buy in a place like Doveton, or Franga North, or Cranbourne etc.

Meanwhile; the yuppie wants to be in the cafe loop, so will only buy in Chapel st, Southbank, St.Kilda etc - won't be seen dead in Doveton and therefore have to wait until they can afford the higher priced property in the cafe loop areas, and are often forking out ridiculous amounts of rent in those areas because they can afford to, thus hindering their progress towards being able to afford something sooner.

 

[BoatBoy]

BoatBoy,

Yes it was a huge generalisation, however it is warranted as I lived in Melton for over 20 years and a lot of people I knew were renters and I saw first hand the level of 'respect' they had for where they lived.

In saying that, my parents rented and treated the home as thier own, in fact ended up buying it off the landlord!

So I guess the more I think about it, it really is a mixed bag, you can have good and bad tenants no matter what.

So then it gets back to how good your PM is sorting out the trash

and

As in our guy above, all good for 2 years then lost job and GF break up and the wheels fall off.



Dave