A useful investment shortlist starts with an affordable holding budget and evidence about the particular property. There is no permanent “best suburb” ranking: results change with purchase price, dwelling type, costs and the investor’s circumstances.
Set the budget before choosing the postcode
Include purchase costs, loan repayments, vacancy, management, rates, insurance, maintenance, strata and any applicable land tax. Keep cash for unexpected repairs and lost rent. Compare a lower-rent and higher-cost scenario before deciding what you can hold.
Compare comparable properties
Use dated settled sales and leased-property evidence, keeping houses, townhouses and apartments separate. City-wide medians and advertised rents are starting points, not forecasts of the return on a particular purchase. Note each source, sample and reporting period.
Investigate demand and competing supply
Check actual transport access, commute times, services and nearby competing listings. Review council planning information and approved development rather than treating an announced project as completed infrastructure or assured growth. Inspect at different times for noise, traffic and access.
Check the building and title
Obtain appropriate building and pest inspections and legal contract review. For strata, review records, capital works plans, levies, defects and proposed special levies. A cheap purchase can have substantial future costs.
Separate yield, cash flow and growth
Gross yield is annual rent divided by property value. Net operating yield deducts operating costs; finance and tax are separate cash-flow considerations. Capital growth is uncertain and leverage magnifies losses as well as gains. Choose a property that remains manageable without relying on a rising market.
