Cash cow suburbs are the holy grail of investors who look for positive cash flow because they provide high rental yield driven by genuine rent demand. Due to recent pandemic induced lockdowns and border closures, however, some of these locations can be highly risky, especially if they rely on rent demand from migrant arrivals, overseas tourists or international students.
You will still find them in areas with large numbers of permanent renters, such as the older, well established but ungentrified ex Housing Commission precincts and also rural towns which have pools of permanent renters whose local ties are too strong to encourage them to leave.
Holiday destinations can provide high rental yields, but the demand is often seasonal, peaking during the summer holiday season, or during the winter months in tropical locations and alpine resort towns. .
Some cash flow locations experience a temporary rise in rental demand when mines are constructed or further developed and during transport infrastructure projects including the building or expansion of railway lines, ports or highways. These rental booms are most common in remote and regional areas where the workers must rent in nearby towns until the project is complete, when the renters leave and the high cash flow often ends.