How I Score Suburbs Before Investing a Dollar: The 8-Factor Framework That Filters 95% Out

I'm going to give you the exact scoring system I use to evaluate suburbs for investment. It's not proprietary software. It's not AI. It's eight factors, each scored 1-10, pulled from publicly available data sources.

Any suburb scoring below 60/80 gets eliminated. No exceptions.

I developed this framework after making a bad investment in 2017 — a suburb that looked attractive on the surface but had structural problems I didn't see because I was evaluating vibes instead of data. That mistake cost time and opportunity. It also built the system I now use for every decision.

Here are the eight factors, what they measure, where to find the data, and how to score them.

Factor 1: Vacancy rate (10 points max)

What it measures: Rental demand relative to supply. Data source: SQM Research (free vacancy rate charts by suburb) Scoring:

• Below 1.0%: 10 points
• 1.0-1.5%: 8 points
• 1.5-2.0%: 6 points
• 2.0-3.0%: 4 points
• Above 3.0%: 2 points

Vacancy rate is the single most important leading indicator of rental market health. Below 2%, landlords have pricing power — they can raise rents and still attract tenants within days. Above 3%, tenants have choice, rents stagnate, and vacancies can stretch to weeks 1.

Every suburb in our active portfolio sits below 2%. Hampton Park: 1.5%. Cranbourne: 1.3%. Narre Warren: 1.4%. Berwick: 1.2%.

Suburbs with vacancy above 3% are almost always new-estate corridors with oversupply (Clyde, Clyde North, Officer South) or regional towns experiencing population decline. Both are disqualified regardless of other factors.

Factor 2: Land-to-value ratio (10 points max)

What it measures: How much of the purchase price is dirt versus building. Data source: Council rate notices (land value), recent comparable sales Scoring:

• Above 85%: 10 points
• 80-85%: 8 points
• 70-80%: 6 points
• 60-70%: 4 points
• Below 60%: 2 points

This is the factor that separates wealth-building investments from money pits. Land appreciates. Buildings depreciate. If 80% of your $650,000 purchase is land ($520,000), you're riding a $520,000 asset that grows at 5-7% per year. If only 50% is land ($325,000), your growth engine is half the size 2.

Older suburbs with 1980s-1990s housing stock on 600+ square metre lots score highest. The buildings are worth less relative to the land — which is exactly what you want.

New estates with 2015-2020 builds on 350-400 square metre lots score lowest. The building is worth $250,000-$300,000 on a $600,000 purchase. That's 40-50% building value — depreciating every year.

Factor 3: Population growth (10 points max)

What it measures: Demand trajectory. Data source: ABS Regional Population Growth data (free) Scoring:

• Above 3.0% annually: 10 points
• 2.0-3.0%: 8 points
• 1.0-2.0%: 6 points
• 0-1.0%: 4 points
• Negative growth: 0 points

Population growth drives everything. More people need more housing. More housing demand pushes rents up and vacancies down. Rising rents justify higher property values.

The City of Casey (encompassing Hampton Park, Cranbourne, Narre Warren, Berwick) grew at 3.2% annually over the five years to 2020 — more than double the Melbourne average of 1.5% 3. That growth rate puts 10 points on the board immediately.

Suburbs with negative or flat population growth — typically inner-city areas experiencing a demographic shift from families to singles, or regional towns losing employment — score zero. I don't invest against population trends.

Factor 4: Median days on market (10 points max)

What it measures: Buyer demand and liquidity. Data source: REIV quarterly data, realestate.com.au suburb profiles Scoring:

• Under 20 days: 10 points
• 20-30 days: 8 points
• 30-45 days: 6 points
• 45-60 days: 4 points
• Above 60 days: 2 points

Fast-selling suburbs are liquid suburbs. If you need to exit, you can. Slow-selling suburbs trap your capital.

Hampton Park's median days on market is 24. That means half of all properties sell within three and a half weeks of listing 4. In a market where interest rate changes or personal circumstances might force a sale, that liquidity is worth real money.

Suburbs where properties sit for 60+ days are sending a clear signal: demand is weak, pricing is uncertain, and negotiation power sits with buyers. That's fine if you're buying (it creates opportunities), but it's a risk factor for your exit.

Factor 5: Infrastructure pipeline (10 points max)

What it measures: Future growth catalysts. Data source: Council strategic plans, state government infrastructure announcements Scoring:

• Major transport project underway: 10 points
• Health/education facility approved: 8 points
• Town centre/activity centre rezoning: 6 points
• Minor upgrades planned: 4 points
• No infrastructure in pipeline: 2 points

Infrastructure creates price step-changes. The announcement of a train station, hospital expansion, or town centre redevelopment reprices land within a 2-3 kilometre radius — often by 10-15% within 24 months of announcement 5.

Cranbourne's line upgrade and Berwick's Casey Hospital expansion are the southeast's two biggest current catalysts. Both score 10 points. Suburbs with no planned infrastructure — many established middle-ring suburbs where everything is already built — score 4 or below.

The key is distinguishing between 'planned' and 'dreamed of.' A project with government funding and a construction timeline scores 10. A project mentioned in a council submission but not funded scores 4 at best.

Factor 6: Owner-occupier ratio (10 points max)

What it measures: Suburb stability and price resilience. Data source: ABS Census QuickStats (free) Scoring:

• Above 75%: 10 points
• 65-75%: 8 points
• 55-65%: 6 points
• 45-55%: 4 points
• Below 45%: 2 points

Owner-occupiers maintain their properties better than tenants. They invest in gardens, renovations, and streetscape improvements. Suburbs with high owner-occupier ratios have better street appeal, lower crime, and more stable prices through downturns 6.

Conversely, suburbs with high investor concentrations (below 50% owner-occupier) tend to be more transient, more volatile, and more susceptible to downturns. When prices drop, investors sell faster than owner-occupiers because they're not emotionally attached.

Hampton Park: 72% owner-occupier. Berwick: 78%. These are family suburbs where people buy, raise kids, and stay for 15-20 years. That stability underpins price resilience.

Factor 7: Rental yield potential (10 points max)

What it measures: Income generation capacity. Data source: Rental listings, comparable rent analysis, PM data Scoring:

• Above 5.5% gross (with value-add): 10 points
• 4.5-5.5%: 8 points
• 3.5-4.5%: 6 points
• 2.5-3.5%: 4 points
• Below 2.5%: 2 points

I score yield potential, not current yield. Current yield on a standard rental in Hampton Park is about 3.8%. But with a $110,000 granny flat addition, the combined yield jumps to 5.5-6.0% 7. That value-add capacity is what I'm scoring.

Suburbs where value-add is physically impossible (small lots, no side access, council restrictions) score based on as-is yield only. Suburbs where 600+ square-metre lots with side access are common and council permits secondary dwellings score based on improved yield.

The top-scoring suburbs in our portfolio achieve 5.5-6.5% gross yield post-improvement. Anything below 3.5% gross — even with value-add — fails the minimum threshold.

Factor 8: Socioeconomic stability (10 points max)

What it measures: Tenant quality and community resilience. Data source: ABS SEIFA index, Census income data Scoring:

• SEIFA percentile 50-70: 10 points
• SEIFA 35-50 or 70-85: 8 points
• SEIFA 20-35: 6 points
• SEIFA below 20 or above 85: 4 points

This factor is counterintuitive. You'd expect higher socioeconomic scores to be better. But extremely affluent suburbs (SEIFA 85+) have terrible yields, high purchase prices, and tenant pools limited to high-income earners. They score poorly for investment.

Extremely disadvantaged suburbs (SEIFA below 20) have high yields but also high tenant turnover, higher arrears, and higher maintenance costs. They score poorly for different reasons 8.

The sweet spot — SEIFA 50-70 — represents suburbs where median household incomes are $75,000-$100,000. These are working and middle-class areas where tenants can afford $450-$550/week rent, employment is diversified across industries (not dependent on one employer), and community infrastructure is adequate.

Hampton Park sits at SEIFA percentile 45. Cranbourne at 42. Narre Warren at 55. Berwick at 72. All within the productive range.

Putting it together: I tally all eight scores. Maximum is 80. Our current portfolio suburbs score between 62 and 74. Anything below 60 is eliminated. It's not a perfect system — no scoring framework is — but it filters out the 95% of suburbs that don't meet our investment criteria, leaving me with a shortlist of 3-5 suburbs to investigate further with physical due diligence 9.

The framework takes 45 minutes to run per suburb. That's 45 minutes that saves you from spending $650,000 in the wrong postcode.