Choosing the Right Investment Property: What Really Matters

Buying an investment property is not about picking the “nicest” home or chasing short-term trends. The strongest performers are usually the properties that balance growth potential, rental demand and long-term resilience. Getting the fundamentals right from the outset can make a meaningful difference to both performance and risk over time.

Below are the key factors every investor should consider before committing to purchasing an investment property.

Location comes first - always

You can renovate a property, but you can’t change where it sits. Location remains the single most important driver of long-term capital growth and rental demand.

Look for suburbs with:

• Consistent owner-occupier demand (not investor-only areas)
• Proximity to employment hubs, transport and everyday amenities
• Limited land supply or barriers to oversupply
• A history of steady, sustainable price growth rather than sharp spikes

Well-located properties tend to hold value better during market shifts and attract stronger tenants year after year.

Understand the local rental market

A good investment must be easy to lease, not just easy to buy. Before purchasing, assess how the property will perform as a rental in real terms.

Key things to check:

• Current vacancy rates in the suburb
• Typical days on market for similar rentals
• Weekly rent levels for comparable properties
• The dominant tenant profile (families, professionals, students, downsizers)

The goal is depth of demand - suburbs where multiple tenant types are actively looking reduce vacancy risk and support rental growth.

Choose the right property type for the area

Not every property type suits every suburb. What performs well in one location may struggle in another.

As a guide:

• Family homes generally perform best in owner-occupier suburbs with schools and parks
• Units and townhouses suit inner and city-fringe areas with professional renters
• Newer properties may attract higher rents but can come with higher purchase prices and lower growth
• Older properties can offer stronger land value and value-add potential if well located

Always assess what renters are actually looking for in that suburb - not just what fits your budget.

Focus on fundamentals, not finishes

Cosmetic features date quickly. Fundamentals last.

Prioritise:

• Practical layouts
• Natural light and ventilation
• Parking (where relevant to the area)
• Storage
• Low ongoing maintenance requirements

A well-designed, functional property will attract tenants more consistently than one relying on trends or high-end finishes.

Assess holding costs and cash flow

Even growth-focused investors need to understand the numbers. A property that strains cash flow can limit flexibility and increase risk.

Before buying, factor in:

• Loan repayments at conservative interest rates
• Council rates, water and strata (if applicable)
• Insurance and maintenance allowances
• Realistic rental income, not optimistic projections

You don’t need a property to be positively geared, but it should be comfortably manageable.

Consider future growth drivers

Strong suburbs usually have reasons for future demand, not just past performance.

Look for:

• Infrastructure investment
• Improved transport links
• Urban renewal or rezoning activity
• Lifestyle upgrades such as cafés, retail and public spaces
• Employment or education hubs nearby

Growth is rarely accidental - it’s typically supported by people, jobs and infrastructure.

Think long term

The most successful property investors are patient. Short-term market movements matter far less than buying well and holding quality assets.

Ask yourself:

• Would this property still appeal in 10 -15 years?
• Is it suited to a broad market, not a niche tenant?
• Does it sit in a suburb people aspire to live in, not just invest in?

Long-term thinking reduces risk and allows compounding to do the heavy lifting.

Final thoughts

A strong investment property is rarely about timing the market perfectly. It’s about buying the right property, in the right location, with fundamentals that support both growth and rental demand over time. By focusing on location, demand, property suitability and long-term drivers, investors can make decisions with confidence rather than emotion.

If you want guidance tailored to your budget, strategy and preferred locations, a local, data-driven approach will always outperform generic advice.