Real estate has many advantages, including tax savings and wealth generation. However, there are some drawbacks.

If done correctly, property investment can provide a great way for you to build wealth and protect your financial security. It is important to plan carefully and make a strong commitment to your investment goals.

What are the benefits to property investing?

Stability, security

All people need a place to live — therefore, properties are almost always in demand. Although the housing market is subject to market fluctuations, it is more stable and likely to yield fixed returns. The stability and security of real estate are generally better than other investment options.

Positive cash flow

Due to the high demand for housing, an investment property can generate a steady stream passive income. This is especially true if your rental income exceeds monthly payments and maintenance expenses. Rent income can be used to pay the mortgage or for other expenses.

Tax benefits available

Residential rental property owners who maximize their tax returns can take advantage of tax deductions. For a lower tax rate, you can claim expenses related to managing and maintaining your rental property.

Long-term investments

It is possible for the property to appreciate in value and bring in more rental income if it’s located in a high-yield area. You can increase your cashflow and use this to grow your investment portfolio.

What are the drawbacks of investing in real property?

Insufficient liquidity

Investing in property will not give you quick access to cash — unlike stocks, it takes a longer time to sell a property. In an emergency situation, you cannot expect to cash your investment.

High entry cost

Due to high costs of financing, many Australians cannot invest in property. Deposits can cost anywhere from thousands of dollars to millions.

Our investment property calculator will help you determine if one is possible for you.

Avoiding costs

It is important to plan and prepare well before investing in property. Owning a property has many ongoing costs, such as mortgage repayments, council taxes and maintenance and renovations expenses. Insurance is also an expense. You should develop an investment strategy to maximize the potential income from your property.

Negative tenants

Landlords may have a difficult time managing bad tenants. Landlords may feel overwhelmed by tenants who are not trustworthy. Tenants who are not punctual with rent payments or cause damage can lead to emotional stress as well as financial losses.

What is a good property to invest in?

Property investing has many advantages and disadvantages, but some factors can make or ruin your investment. When searching for property, it is important to plan ahead and do your research. These are some important things to remember when searching for the perfect investment property.


A property’s location has a major impact on the rental demand, tenant quality, and rate of return. If the property is in a high-growth market, rental price, tenant quality, and the property’s value will likewise increase. High-growth areas are home to a large and growing population. They also have close access to amenities and a vibrant job market. These areas also enjoy low crime rates, easy access to public transportation, favorable taxes, and affordable health insurance.

Condition of the property

When selecting a property to invest in, it is advisable to conduct a thorough home inspection to know if the property is in a sturdy condition and tenant-ready, as repair and maintenance expenses can eat into an investor’s funds and can have a huge effect on cash flow.

Listings and vacancies

Low numbers of listings and vacant homes will result in a strong rental market. In order to increase rents, landlords can raise vacancy rates.

Positive cash flow

An investment property should have a strong monthly positive cash flow. This means that the property’s monthly income must be enough to cover all expenses.

Potential for capital growth

Cash flow alone is not enough. It is essential that investors are able to profit from the property. It considers how the investment property is financed. Cash on Return is the most popular way to calculate profit. Experts agree that great investments can yield cash returns up to 8%.

The best suburbs for investment properties are those with high incomes.

Experts believe suburbs with high rental yields and low property prices are the best areas to invest in high-yielding properties. These areas are usually located outside major cities that tend to have higher yields, but also more expensive housing.

Your Investment Property lists three suburbs that have the highest rental yields. These numbers were last updated March 2022.


Suburb (House/Units).

Median price

Gross Rental Yield

New South Wales


Warren (H)



Sussex Inlet (U).



Broken Hill (H)





Donald (H).



Murtoa (H)



Warracknabeal, (H)





Pioneer (H)



Collinsville (H)



Dysart (H).



Northern Territory


Tennant Creek (H)



Millner (U)



Karama (U)



South Australia




Port Augusta






Western Australia


Kambalda East






Kambalda West





Denman Prospect




















 Source: CoreLogic. This data is for the December 2021 period.