Most investors spend time looking for the vanilla dwelling, the house or unit that will accommodate the mainstream. They believe that if the property appeals to a broad range of people, the rentability of the place will increase and be easier to rent. And while this is true on the surface, it also creates the new problem of too much choice. When people are given a large range of similar things to choose from – for example, two bedroom apartments with parking – they tend to chop and change often, always looking for a better deal, improved location or change in view – they wonder if there is a better option.
By narrowing your options, and finding a niche market and catering specifically to them, you are supplying features to people who really value those things. As an example, a small number of people value sustainability and will search for houses that have eco-credentails. Their options are very limited, so when they are presented with a solution, they are less likely to search for, let alone find, another property that is as suitable.
Examples of niché markets:
Houses for the 3rd Age:
Retirement villages and homes are not for everyone yet there are few properties that are targeted at the 60+ age group, a market of active, healthy and independent people who would like to remain part of the community. Properties that cater specifically for these people are rare. Proximity to public transport, amenities and medical care are important, flat land, small gardens or courtyards and single level dwellings are all appealing. Additional features such as allowances for small pets such as a dog or cat, weekly services such as cleaning and maintenance can also help to secure and keep this ideal tenant.
Eco-houses:
Sustainability is becoming ever popular and many home owners build or renovate with ‘green-coloured glasses’ but for renters with a green bent, the market is filled with compromise. Properties to let with eco-credentials will appeal strongly to a small (but growing) market. As sustainability starts to drive building products and solutions (think solar hot water, geo-thermal heating/cooling systems) that save money in the long run, this market can be swayed and kept long term if their desire for a green home is satisfied.
Family homes:
This demographic is almost too large to be called a niche however if you cater specifically to families with primary school aged children by investing in properties that are close to schools, public transport, has a versatile outdoor area – this can either be a garden or a nearby park – you can secure a good tenant with no intention of moving on. Parents typically don’t want to move their children from one school to another so if you are able to create the perfect family home – the perfect family will move in and, without a good reason, won’t move out for some time, ensuring you get a consistent rental income on your investment.
Student accommodation:
Student accommodation can be fraught with problems. Students are notoriously transient, they often only require somewhere to live during semester, returning to the family home during the breaks. As it is often their first time living away from home, they can have some less than ideal cleanliness standards. All of these things can, however be turned to the landlords advantage. Innovations such as rent reductions for long term rent, holiday rental via services such as AirBNB, and charging for optional extras such as a regular cleaning service can take advantage of this demographic.
For further information on finding your ideal investment property, contact a buyers agent such as Amanda on My Side, who has in-depth knowledge of the market, market trends and potential niches.
