When it comes to attracting tenants, selecting the most suitable type of property to complement the demographic of the area, is the ‘secret sauce’ that will help you avoid dreaded vacancy periods.
Here, we explore the criteria of various common employment clusters – and show you how to target your property needs to align with its eventual occupants.
‘White collar’ workers
It would be easy for us to simply list a bunch of inner-city suburbs here. After all, if a city centre is a bag of hot chips, white collar workers are the seagulls: they flock there and stay for a lifetime.
But there’s more to ‘white collar’ suburbs than that. Firstly, let’s take a look at look at this demographic from an investment point of view. Why we should target them at all?
Our white collar workers are the office professionals of the world. They work in finance, business and administrative sectors.
Here are a few reasons they’re a boon for investors:
- They are frequently high income earners
- They can be solid, long-term tenants
- They are often young and upwardly mobile, preferring to rent so they can move easily for work
- They have a positive impact on the suburbs they live in.
Office professionals are a captive market, needing to live close to capital cities and regional centres where the jobs are.
But since these areas can be expensive, they’re also a big demographic of ‘rentvestors’ – they’re priced out of the city they work in, so they rent where they want to live and buy an investment property they can afford elsewhere.
So yes, inner-city suburbs are great hotspots for the white collar market.
But if you as an investor can’t afford inner-city either, fear not: now, once-blue collar suburbs are being pushed further out as the white collar brigade marches in.
It goes without saying that students like to live near their place of study. It’s a no-brainer, right? Focus your search on the streets and areas surrounding the local TAFE, university or training hospital, and you can’t go wrong.
Tradies and blue collar workers
In times gone past, there have been more distinct lines between white collar suburbs and the less affluent blue collar neighbourhoods. But in modern Australia, many suburbs transition seamlessly between blue and white, especially as some highly qualified tradespeople have the potential to earn more than their pencil-pushing counterparts!
Finding suburbs in transition can be a brilliant investment manoeuvre because they are affordable neighbourhoods on the cusp of a cosmetic makeover.
For example, Parramatta was traditionally a working-class area. Now, there are more tertiary-educated residents here, working in higher paid jobs.
What does this mean for investors? It means rising property prices and higher demand for rentals.
Emerging or regentrifying suburbs appeal to a range of demographics, but they particularly attract white collar workers like bees to a honey pot.
Where there is redevelopment, they will come. Maybe it’s because they’re a more ‘trendy’ demographic, or because they have the cash to live a more eclectic lifestyle, but white collar workers do tend to target gentrifying suburbs.
The take-home message is that while city centres are a good pot-shot for targeting many different types of renters, there are plenty of up-and-coming suburbs that are attracting a range of qualified (read: employable and reliable) workers too. And with office workers bringing the cash and the change, they’ll transform these aspirational suburbs into hot properties in the future.
If you wish you’d bought a Sydney workers cottage 20 years ago for a few pennies, start looking at the up-and-coming suburbs that are drawing in more white collar workers.
Of course, if you can afford a property in Surry Hills, where 90% of the population are white collar workers, that’s a pretty good bet too.
Keen to see where Melbourne’s most moneyed sleep? Take a peek at some of the jaw-dropping, elite and exclusive homes sold in Melbourne this spring.