Investors could be making a mistake purchasing a house on the best location. They probably believe that a renter’s dream house is a four-bedroom with great water views, but the reality is that renters are only concerned about the basics.
This is basically what new research found: investors are not likely to see a return on their investment if they rent out properties in affluent suburbs like New Lambton Heights or Coal Point.
So what do tenants really want? Options!!!
Here is a list that may help you focus on the location of your next investment:
- Houses within 500 metres of a train station, bus route or close to Newcastle University are the best locations for investors. Renters, in general, belong to the low income group and are less likely to own a private vehicle and would much prefer public transportation.
- These renters would generally be younger, or in their 20’s rather than in their 70’s, as they would find it easier to use public transport.
- Also good targets for investors are houses around Callaghan, Waratah West, Warabrook, Shortland and even apartment units in Jesmond.
- New Lambton Heights and Coal Point are richer suburbs, and therefore, offer amenities that mostly appeal to a homeowner rather than a renter.
- Homeowners generally preferred to be in districts near schools.
- Investors aiming for high gains should stay away from suburbs out by the lake and areas that are affluent.
- People who invested in apartments were receiving better returns than those with houses most likely because they are located in more convenient areas.
According to this recent research, investors should consider what renters want, not what they want, like proximity to public transport, education, etc.
Try thinking like the ideal renter instead of what appeals to you and find an investment property that will always be occupied!