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Beyond hotspots: How connections drive regional ROI
To ensure the best regional investment, out-of-town investors must understand demographics and tenants, and build strong local relationships to access the best opportunities and maximise returns.
With property prices soaring across the nation, regional centres have been attracting more and more investors, driven by capital growth, rental yields, and a slower pace of life.
Lifestyle Group founder David Gray said that for those looking to make a good investment, the appeal of regional property extends beyond pricing alone.
“Regional investing isn’t about chasing the cheapest option,” Gray said.
“It’s about the fundamentals – liveability, tenant demand, long-term growth, and community infrastructure.”
“When those pieces align, regional markets can outperform expectations over time.”
Understanding the demographic
Lifestyle Port Macquarie business development manager (BDM) Tarym Wright said that when purchasing in regional centres, buyers need to understand the area's tenant profile and its impact on their property.
“If you’re investing in a mining town, expect more transience and higher turnover, and that smaller properties may perform better for single individuals,” Wright said.
“If you’re investing coastally, more young families are moving from metro areas, so a 3+ bedroom house performs well, and walking distance from the beach is a large drawcard.”
Similarly, Lifestyle Coffs Harbour business and investment relationship manager Harlin Sidhu said understanding the local tenant demographic was critical when operating in an area that caters to a diverse population.
She said that Coffs Harbour was not a one-profile market, as the region has been experiencing strong demand from young families, healthcare and education workers, tradespeople, and lifestyle renters.
“Proximity to schools, the hospital, beaches and employment hubs is often more important than being close to the CBD.”
“Metro investors need to shift from density-based thinking to livability-driven demand.”
Relationships hold the key to opportunity
Lifestyle Clarence Valley investment relationship area manager Karen Gorton said investors should build relationships with professionals in the areas they are looking to purchase.
“Form a good relationship with a BDM so they can push off-market listings to them and give the best rental advice,” Gorton said.
“Not all properties are good investments; some sales agents will sell you anything.”
Similarly, Wright said that by building strong relationships in the region, potential buyers could find themselves on the region's VIP list, giving them a significant advantage.
“This will take you from the B list as an ‘out of area buyer’ to the A list.”
She added that by aligning with a local property manager, investors can leverage local experience and gain insight into potential returns.
“A property manager will also give insights on vacancy, days on market, and tenant profiles.”
“They may also divulge rental hotspots that are based on school catchments or amenities.”
“Many investors may simply go with the agency they purchase through for ease – do your research and make sure you are making an informed decision.”
Lifestyle Forster-Tuncurry BDM Clea Brook said that investors should be upfront with local agents and clearly state their purchasing intentions.
“Be clear on what you are looking for and the specifications about the property.”
“It is always a good idea to speak to agents about your goal, whether it is a five-year plan or growing your portfolio.”
The value of a good tenant
While renters may come and go in the metropolitan market, the outlook is quite different beyond the capital cities.
Brook said that metropolitan investors needed to be aware of and become comfortable with the slower pace typically seen in regional markets.
“Enquiry numbers on rental properties are less in a regional town due to the population difference.”
While the number of enquiries may be lower, Brook said that she had seen an increase in the length of tenancies, which could present a significant opportunity for investors.
“Finding the right tenant for longer periods of time will maximise your returns, with less vacancy periods without rent.”
With regional rents rising rapidly in recent months, Wright said increased competition has emerged in the rental market, as hybrid workers on “metro wages” compete with regional workers on regional salaries.
“This means that more care is taken during tenant selection to ensure that tenants have affordability,” Wright concluded.