Property Advice

Private Property’s crash course on becoming a property investor: Part Three

Private Property Reporter | Feb 9, 2026

This is not the ‘ultimate’ guide because the property market goes through many cycles which are impacted by a number of factors, but it does give you working knowledge about how to invest in one or multiple properties to ultimately build a portfolio with confidence.

Begin your search

In Part One, we stressed the importance of knowing and understanding your financial position, and in Part Two, we mapped out how to use equity from your primary home loan to buy your first investment property.

Assuming you are on top of your finances and that you have determined you are likely to be approved for a second home loan, have enough savings, or will be using equity in your current home loan, you may feel you are ready to look for the perfect investment property within your budget.

Before you do, you need a strategy that brings together your budget, financing options, and the type of property that you wish to purchase. You’ll want to choose the right investment property, and one that will give you the best return on investment (ROI).

These tips will help you make an informed decision about whether a property is a suitable investment for you.

Property location

You’ve likely heard the real estate cliché “location, location, location,”, which has endured through decades. A ‘prime’ location generally offers the potential for a higher rental and value appreciation although you can similarly expect to pay a ‘prime’ price. Look for areas that provide essential amenities like education and medical facilities, and which are close to transport routes and retail offerings.

Crime and safety

Certain areas are considered less desirable because they have a high crime rate or there is no evidence of security measures. You should also note whether a property is sited next to a building site, vacant land, or has a high percentage of loiterers. Research the crime statistics of an area, or talk to estate agents who work in the region.

Type of rental

You need to make a decision about the type of person you prefer to rent to.

Students: Rental units within walking distance of a university are popular but most want a 10-month lease. They like studio apartments and do not mind minimal cooking facilities.
Single professionals: If your unit is close to commercial zones, you can expect your tenants to stay for between 1-3 years. Apartments or townhouses are preferred.
Young couples: Smaller properties including apartments, townhouses and free-standing houses with manageable gardens. They generally stay on such properties for between 1-3 years.
Families: Enjoy suburb or estate living and generally stay for between 1-3 years. They look for larger-sized townhouses and free-standing homes.
Retiree’s: Most stay in rental properties for several years. They prefer properties that require little to no maintenance, and within secure gated communities. Townhouses, retirement homes, and estate properties are preferred.
Nomads and migrating tenants: For obvious reasons they want short-term leases, usually between 3-6 months. This means a high turnover of tenants but lots of paperwork. Apartments are favoured.

Term of lease

Based on the type of tenants you want, you need to decide whether you want to offer short- or long-term leases. Short is usually anywhere from monthly to 3-6 months, with an option to renew. Long-term leases are considered anything from one year onwards. The shorter the lease, the higher your administration and marketing costs, and of course you’ll have to factor in your time.

Furnished or unfurnished

Furnished properties attract higher rentals to cater for damage and insurance costs. Unfurnished is preferred because you can market to a greater pool of potential tenants. Students, however, prefer to have the basics provided, such as a bed, curtains, and basic kitchen appliances, shelving, and a desk with chair.

Managing agent or not

It is helpful to appoint a managing agent who will oversee the entire rental process, from administrative, financial, advertising to tenant interviews and credit checks, and inspections. Without an agent, these are aspects that you would have to manage yourself, which can be time-consuming, and requires you to have some knowledge of the Rental Housing Act and any regulatory changes. Agents typically charge from 8-12% of the monthly rental income.

Property condition

When buying your first investment property, it is usually best to buy something as close to turnkey as possible. You’ll want to get this into the marketplace as soon as possible. Some level of maintenance is usually required after purchase, such as painting, fixing wall holes and cracks, and cleaning.

Future maintenance

There are a large number of responsibilities that fall to landlords to ensure a property remains habitable and safe. This includes: general maintenance, appliance upkeep, cleaning in-between tenants, and any structural and service delivery (e.g.: electrical/water) repairs. Landlords should budget between 1-3% of the property’s value annually, for maintenance and repairs.

Insurance

A nice-to-have product is Landlord Insurance. This covers defaults on a lease agreement, loss of income, eviction notice costs, loss of earnings through tenant damage, and protection of the physical building. Costs vary depending on location, extent of insurance required, and property features.

Research

This aspect cannot be stressed enough. You’ll need to thoroughly research the property market, and not only focusing purely on the location that you’d like to buy in, but also understanding what types of properties are most in demand, why, and where. Bear in mind that you don’t need to choose a property that suits you because you won’t be living in it. You need to make a selection based on all the factors mentioned above, and where you’ll be most likely to secure the type of tenants you want, and on a regular basis.

Compare locations, rental prices, value, condition, style, local amenities, attractions, and features. And do the math on one or two properties. For example, find a property that aligns to your strategy. It doesn’t necessarily have to be one that you would buy, this is purely to gain an understanding of costs. Use Private Property’s calculators to determine what sort of rental you would need to charge to meet the home loan commitments, as well as factoring in costs of listing privately on Private Property, and drawing up lease agreements, and any maintenance spend.

Doing this will give you a great understanding of how quickly you will be able to pay off the property and hold increasing equity in the property.

Finally … view properties

After you have considered all aspects and researched sufficiently, you’ll be ready to make appointments to view properties that align to your strategy.