What to look for in an investment property in 2026

If you’re on the lookout for a new investment property this year, these are the steps to follow:

Start with location, but look beyond a fashionable postcode. Renters often value convenient access to employment, public transport, schools, shops and healthcare over somewhere trendy. Check local vacancy rates, planned infrastructure, new housing supply and the balance between owner-occupiers and renters. Strong demand today may not last if many similar rentals are due to enter the market.

Choose a property type that suits the people most likely to rent in the area. A house with secure outdoor space may work well in a family neighbourhood, while a low-maintenance apartment may suit a precinct near universities, hospitals or major workplaces. If you are considering a unit, read the strata records carefully. High levies, major remedial work or insurance issues can quickly reduce your return.

• View the property through a renter’s eyes. The following features can matter more than expensive finishes:
• A practical layout with natural light and good storage
• Reliable heating and cooling, ventilation and reasonable energy efficiency
• Secure parking or convenient access to transport
• A study area, second bathroom or pet-friendly outdoor space where demand supports it
• Durable fixtures that are straightforward to repair and maintain

Run your numbers using conservative assumptions. Gross yield is useful, but net yield provides a clearer picture after council rates, strata levies, insurance, property management, maintenance and the inevitable vacancy periods. Allow for unexpected repairs and test whether you could continue holding the property if expenses or interest rates increased.

Older homes may offer renovation potential and still be able to deliver the capital growth you’re hoping for, but take the time to book building and pest inspections and price any immediate work before buying. Meanwhile, newer properties may require less maintenance, but purchase premiums and smaller land components can affect value.

Buying brand new is another option, but you have to factor in timelines and the long-term growth potential of your investments, while also making sure you have chosen a developer you can trust. 

Finally, with changes to negative gearing and capital gains tax, it’s important to have a clear picture of the holding costs and tax you will pay when you sell based on the latest regulations rather than past calculations. 

Before committing to your purchase, speak with a locally based property manager who can provide a realistic rental appraisal and explain which locations, property types and features renters are prioritising in 2026.