How to Find the Best Suburbs to Buy Investment Property in Australia

Why Smart Investors Rely on Data to Secure High-Yield, High-Growth Properties

Buying an investment property is a proven strategy for building long-term wealth through rental income, capital growth, and tax benefits. Increasingly, first home buyers are choosing to invest in property first—often as “rentvestors”—before purchasing a home to live in.

However, one of the most common misconceptions is that property investment always delivers strong returns. While it can be highly rewarding, success depends on how well you manage the asset—and whether you make decisions based on clear data rather than emotion or hype.

The Key to Investment Property Success? Analytical Research Over Emotion

When buying your own home, it’s easy to be swayed by personal preferences. But investment properties must be assessed purely on performance potential. It’s not about whether you’d like to live there—it’s about whether the numbers stack up.

You want to invest in a location with:

• Reliable capital growth
• Strong rental yield
• Low vacancy rates
• Desirable demographics

If you might move into the property later (e.g. downsizing or upsizing), you can factor that into your strategy—but it should never override the fundamentals of investment analysis.

What Should You Consider When Purchasing an Investment Property?

1. Capital Growth

Capital growth—the increase in a property’s value over time—is the cornerstone of wealth creation in real estate. To grow your equity, you need to invest in areas where demand is rising faster than supply.

Ask yourself:

• Is the suburb well-positioned for future development or gentrification?
• Are infrastructure upgrades (like schools, public transport, or shopping hubs) planned?
• Does historical data show consistent growth?

Smart Benchmark:
Look for areas that have the potential to double in value every 7 to 10 years.

Even a small percentage difference in annual growth makes a huge difference over time.
For example:

• $400,000 property at 8% growth p.a. = $1.86M after 20 years
• Same property at 11% growth p.a. = $3.22M after 20 years

That’s a $1.36M difference—just by buying in a better-performing location.

▶️ Watch: How to Find High Growth Suburbs in Seconds Using SuburbsFinder

2. Rental Yield

Rental yield is the annual rental income expressed as a percentage of the property’s value. It’s essential for cash flow and measuring return on investment.

Gross Rental Yield Formula:
(Annual Rent ÷ Purchase Price) × 100

Example:
$20,000 annual rent on a $400,000 property = 5% rental yield

A high yield doesn’t always mean a good investment—make sure it’s being driven by rising rents, not falling values. And always look at net yield after expenses for a clearer picture of your returns.

3. Vacancy Rates

Vacancy rate measures how many rental properties are unoccupied in a suburb. A low vacancy rate usually signals strong tenant demand and rental stability.

Key benchmark:

• Below 2% = tight rental market
• Below 1% = high-demand area

Every week a property sits vacant costs you money—so the lower the vacancy rate, the better for your cash flow and capital growth prospects.

4. Demographic Data

Demographic stats reveal the type of people living in an area—and the type of tenants your investment may attract.

Key demographic insights to track:

• Population growth trends
• Household income levels
• Percentage of renters vs owner-occupiers
• Occupation types (white-collar vs trade)
• Average household size
• Housing types (detached houses, townhouses, units)

Use this data to match your property type to local demand—and avoid over-investing in areas that won’t attract your ideal tenant.

“Get your Access to our Fully Customisable Investment Property Research and Analytics Tool Now!”

So, Where Are the Best Suburbs to Buy an Investment Property?

Every investor wants to know:

• Where can I buy property under $500,000?
• Where can I get 5%+ rental yield?
• Which suburbs have strong capital growth and low vacancy rates?

We’ve made that research easy for you.

With SuburbsFinder, you can filter over 15,000 Australian suburbs based on:

• Median price under $500K
• Rental yield above 5%
• Annual capital growth above 5%
• Vacancy rate below 3%
• Strong demographics and economic activity

▶️ Watch: How to Find High Yield Suburbs in Seconds Using SuburbsFinder

What’s Included in SuburbsFinder?

This tool pulls together the most comprehensive property investment suburb data in Australia, including:

• Median house/unit prices
• Rental yields
• Vacancy rates
• Historical capital growth
• Population trends
• Household income
• Median rent
• Mortgage and ownership data

It’s the perfect platform for:

• Property investors
• Buyers’ agents
• Mortgage brokers
• Real estate agents
• Property developers

Bonus Tool: Compare Investment Opportunities Side-by-Side

Use our All-in-One Investment Property Calculator to:

• Compare up to 5 different properties
• Calculate cash flow, rental yield, loan costs, purchase costs, and more
• Forecast property value based on projected capital growth
• Understand true ROI over the short and long term

Perfect for investors who want to eliminate guesswork and buy based on numbers, not emotion.

Check out our All-in-One Investment Property Calculator

The most simple and easy to use tool to calculate Rental Yield. It gives you a quick way to compare returns on different investment properties (or investments). It’s a Rental Yield Calculator, Mortgage or Home loan Calculator, Cashflow Calculator, Purchase Cost Calculator, and it also calculates the Forecasted Property Value by Capital Growth. It’s perfect for property investors, buyer’s agent, and real estate agents.

Final Tip: Think Long Term

Property investment is a long-term wealth strategy, not a get-rich-quick scheme. Make sure your finances can support the property through market cycles. Have a buffer in place for:

• Unexpected vacancies
• Maintenance issues
• Market downturns

And always run the numbers before committing—don’t rely on assumptions