What Actually Makes a Good Investment Property in Australia?

What separates a great investment property from a bad one?

In this episode of the Bold Property Podcast, Karl and Cameron break down one of the most common questions investors ask: what actually makes a good investment property in Australia?

Many investors focus on the property itself — the kitchen, the renovation, or how modern the house looks. But successful investing is rarely about the house. It’s about strategy, location, supply and demand, and long-term planning.

Karl and Cameron discuss why the property is simply the vehicle for building wealth, and why understanding market drivers like population growth, infrastructure investment, and migration trends is far more important than cosmetic features.

They also talk about common investor mistakes, the risks of buying property without a clear plan, and why sometimes the best investment opportunities are the properties that most buyers overlook.

In this episode you’ll learn:
 • Why strategy matters more than the property itself
 • The biggest drivers of property growth in Australia
 • How supply and demand influence property prices
 • Why ugly properties can make great investments
 • Why property investing isn’t the right move for everyone

If you're thinking about investing in property, this episode will help you understand what actually matters when choosing the right asset.

 Connect with Karl: https://www.thebarnardgroup.com.au

 Connect with Cameron: https://www.thewaytoinvest.com.au

Transcript

SPEAKER_00 0:10

Welcome to the Bold Property Podcast, where informed decisions shape stronger property portfolios. Your hosts are Carl from the Barnard Group and Cameron from The Way to Invest. Each week they cut through the noise and guide you to invest with clarity, strategy, and confidence.

SPEAKER_02 0:30

Well Cameron, we are back for another episode of the Bold Property Podcast. How are things going?

SPEAKER_01 0:36

Yeah, great. It's uh been exciting start to the year. Uh lots of property buying, which is great. Uh lots of different locations for different strategies for different clients. So it's been a great start of the year. How about yourselves?

SPEAKER_02 0:49

Yeah, it's been a good start to the year. I'm I'm excited for the year ahead. Uh, January has been a bit of a cracker month. There's been a lot uh of talk in the property market. We talked about interest rates, that's up a little bit. Uh the government is starting to talking about changing some of the capital gains tax uh concessions. So there's been a lot of talk in the property market, and there's been a bit of a noise as well. And yeah, just helping clients cut through all of that. So, Cam, I know you're a big uh AFL fan. Did you have a look at the first games on Valentine's Day?

SPEAKER_01 1:21

I did, I did. Um, yeah, it was very romantic. Uh Victoria won. Kway was good, so I was happy and uh lucky I got the opportunity to watch it. So um yeah, it was good. And being Victorian, uh, grew up there, so it was always good to see Victoria win. Uh but yeah, great game. Glad it's back. 25 years is a little bit too long. And um, yeah, bring on the future of state of origin in AFL. How about you so good stuff?

SPEAKER_02 1:50

Well, I'm a rugby union man. Um, I believe in teams that compete internationally, so maybe that'll rub some people up the wrong way. But um give me union union any day of the week. Um there's a couple of games coming up with the wallabies. Uh Australia is looking forward to the Rugby World Cup coming to Australia, which um I'm really, really excited for. Uh, and look, I am a Springbox supporter, don't hold that against me. But um, whenever the Wallabies are not playing them, I do route for the Wallabies. And uh they had a really good year last year. I'm just hoping they can build off that.

SPEAKER_01 2:25

Looking forward to the F1 starting soon as well. Um, yeah, a Winter Olympics happening as we speak, so yeah, there's always something going on. Um, yeah, very excited for all sports going around. Yeah, I can't wait for the F1.

SPEAKER_02 2:39

I follow that religiously. So um, yeah, bring on the the Australian Grand P uh down in Melbourne. So, anyways, uh, we're talking about property. So, the topic for the day is what actually makes a good investment property in Australia? Thoughts?

SPEAKER_01 3:00

Well, that's uh a very broad question, I guess you could say. Um, I guess it comes back to that. I think this is something we touch on a lot is your strategy. What is it that you want out of these properties? Uh I'm in the mix of looking at selling one of my investment properties. Um, why is that? It's because it's done its job for me. So it was my first home. Built it back in 2014, so it was a house and land package. It was able to get me into the market, but its job was to create equity for me, to build uh buy other properties, uh, and it certainly has done that. But it's come to a point where um it's in South Australia, but it's come to that point where it's sort of uh the yields aren't keeping up, it's uh the growth isn't happening as much. And this wasn't bought in like, you know, anywhere close to the CBD of Adelaide, it was quite a ways out, but at that point in time that's what I could afford, and it was hard to get me to the market. So um my strategy is to create wealth, and by selling this, it'll help give me opportunities to buy other properties in other markets uh that will start performing just as good as Adelaide did back and do its job for me. So that's mine, but you can look at also other ways of getting cash flow in um where you want to you know be positively geared, you don't have to worry about adding any extra uh any extra money into it, into your uh mortgage. You could also look at um yeah, creating wealth and building up to get multiple properties into portfolio, whatever your goal is at the end.

SPEAKER_02 4:50

Yeah, and I think you touched on an important point. It's about what your goals are in property. And I see so many investors buy a property for the sake of buying the property, and they never really thought about how that would play out. And second to that is every investor would have their own journey, but you come from a different background, you come from a different starting point, and you really need to understand what is important to you and what you want to do, and what your mates do, that's not necessarily going to be your journey because every person is different. So, another thing we need to talk about when we touch on the topic, what actually makes a good investment property? Sometimes that topic can be slightly misleading because it talks about the property. And that's the other thing I see so many investors do. They focus on the property, like that actual building itself. And they they run through real estate and they look at listings and go, is this a good investment property? Is that a good investment property? And they look at the kitchen, they look at the bathroom, and um, they get very excited because it's been renovated. I just had someone do that today. They just flicked through a listing and said, Hey, is this a good investment property? And I said, Well, looks like a nice property, but we haven't even talked about the location, right? It could be a nice property, but if it sits in the wrong location, that's not going to serve you because it's the right location that gives you the growth drivers. The property is just the vehicle, that's just the asset we secure in that right location. So, you know, I talk about it when I talk to people, it's a funnel, right? First of all, let's understand your financial goals, let's understand what you want to achieve in the long run. Let's then ideally model that out, you know, over the next 20, 30, 40 years. And then let's go, well, okay, where in the country, which state is going to be the best for you? Uh, you know, which city or town's gonna be the best, which LGA, which suburb, which pocket in the suburb, which street? And then we get to the property. So I think a lot of people do it the wrong way around. And the other thing I see as well is you know, you touched on cash flow. Now, a lot of people buy residential property with this idea that, hey, I'm gonna retire on property, but they never really understand what it's about. You know, what I say is residential real estate is great for capital growth, but you don't really get into residential real estate for cash flow, right? Though there'll always be exceptions, but typically it's not great for cash flow, like to retire on, unless you know you've done it for years, you've paid off stuff. A better way of going about it is getting into residential real estate for capital growth, but then look to commercial real estate for cash flow. And I think the mix is extremely important.

SPEAKER_01 7:50

Yeah, I totally agree. Um, because you're gonna get to a point where you know you've done your building of where you want to be in your strategy, and then you're starting to flip it around to where you're paying it off, and you're getting to that point when you're retired and you're hoping that it's all paid off. Um, and then you're working on that cash flow. So, yeah, to try and flip it around, maybe sell an asset to then buy commercial um property, or look at doing it in a self-managed superfund. It's not advice, but it's uh another strategy that you can use to create um wealth um for your retirement, and you know, you don't need that pension, but you need the um that money that you've earned from your great choices in investing in property.

SPEAKER_02 8:37

And we we're talking hundreds of thousands, if not millions of dollars, right? It's not a decision that should be rushed into. Uh I I'm a spreadsheets guy, right? Every time I buy something, you know, there's a whole spreadsheet open and there's a ton of research that goes into it. Even, you know, even I'm talking about electrical drill, right? I want to know what the best electrical drill is to get. Is the battery going to last? All those good things. But I see people you know pay more attention to their socials than they do their property investments. Uh, and I see a lot of people rush into properties uh and then buy the wrong asset. And you know, that comes down to risk in in the property market. Now there's different levels of risk or or different you know components of risk, but to me the biggest risk is investing without a plan, buying the wrong asset in the wrong location, or buying yourself into a corner, right? You're talking big, big, big money. Uh these decisions could be life-changing decisions, and if you get it right, uh it could be extremely powerful, it can mean intergenerational wealth, but if you get it wrong, you can buy yourself into a corner, and you can really stop yourself from moving forward. Now that's at a strategy level when it comes to risk, right? But there's subsections to that as you step through that process, it can be extremely powerful, but there's a lot of risk that needs to be managed along that pathway.

SPEAKER_01 10:13

Having a plan, it gives you that peace of mind. Um, and box what as we touched on before, one one of the biggest things with bioproperty is the emotions around it. If you've got a clear strategy going into it, it's gonna take out a lot of that emotion due to the fact that in I know exactly what I've got to buy, I know exactly where I have to buy, because I know that's exactly where it's gonna get me and lay in goal. So by having a strategy, having a plan, and I know that we both do that within our businesses to set people up, to get a plan to create that right investment to create that end-abwealth thing as well. Um the things are always changing, as we we said, like tax, um, you know, the capital gains tax is about to change, or it could possibly change. To be honest, I hope it does change because then we're gonna get rid of this government. I don't want to get political, but you know, there's other things involved, as in New Zealand just brought it back to get scrap their whole thing because they did it, so it hasn't worked. Twice Labor's done it before, it hasn't worked. I think Paul Keating did it, it lasted three months. So, you know, people learn by the mistakes, but obviously not this guy. But off the political side of it, you know, it's things always changing all the time when it comes to, you know, first home buyers grants, the the gains tax, you know. We're trying to uh Queensland a few years ago tried to implement, oh well, you're paying land tax on um, you know, in Queensland, but you've got assets in other states. Well, we're gonna make sure that you pay that. Well, where are they now? Oh no, they're back in the backseat again. So, you know, Australia's got great opportunities to create wealth um through property. People like change it, but we just need to keep up with the changes and whether or not we or when we do the strategies with you, we calculate these into it. So it's very conservative. You know where you're at, you know where you want to go, and then we help you choose that right property for you to get to your end goal of.

SPEAKER_02 12:13

Yeah, and you're right, like no one can predict the future, right? No one can with certainty say what the future holds. But you know, if you plan accordingly, you manage your risks, you build something that you know sort of takes into account certain factors and you give yourself buffers and plan for that, you can almost ride out any eventuality, right? Now, if World War III kicks off, yes, not much we can do about that. But there's always a lot of noise around governments. And look, I think a big part of it also comes down to education, because a lot of people might hear, okay, we're gonna lose, potentially lose that capital gains you know, tax discount from 50% to 25%, and they freak out about it. But the reality is you're still getting a discount on your tax, right? If all of a sudden you, you know, your salary goes up by$100,000, there's no discount on that. You pay the full, full, full taxable on that. So property actually still gives you a discount, you know, like any other income source, you don't get it, right? So is it great from an investment perspective? Well, no, you'd love to have the tax discount. But even at 25%, you're still getting a discount versus not getting it on any other income class. So look, we'll see how it plays out. Um, there's a lot of talk around this stuff, and then as you said, it has to be reversed because the government made a decision a long time ago to privatize housing, and they had to put incentives forward in order to make it worth it. And for them to then roll that back typically creates a lot of unintended consequences uh down the line, and then they have to revert what they've done. So, look, I I think there's always going to be noise around property, property investing in the property market. So ultimately, back to the question, right? What actually makes a good investment property in Australia? And I think it comes back to the property is just the vehicle. It's about your strategy, your planning, your risk management and risk mitigation. That if you've put a strong foundation in place, you ensure you buy the right assets at the right time and the right locations. Well, then that house, again, it just becomes a vehicle, right? Yes, you want to get a property that's not going to cost you a ton in maintenance unless you want to renovate that. But that is really the last step of a process and a lot of planning that should come before then. Um, so yeah, they're like a lot of people love looking at you know renovation shows, they love looking at the houses. But ultimately, it comes down to a risk-managed, you know, approach, and it comes down to having a very, very clear plan to get to the point where you're talking, you know, property itself. But if we were to sort of step beyond that a little bit, right? And we go, well, okay, let's assume you've got your plan in place, you know, and we start looking at locations, right? What are some of the good drivers for investment property?

SPEAKER_01 15:24

They use that hockey stick analogy. So, you know, places that have sort of been down for a while, uh, and there's quite a lot of good places in Victoria at the moment, but um, you know, it's still that area of they've on their way down, but then they're on the hockey stick up. So I think there's quite a lot of places in Geelong that are like that. Uh, but there's other factors about Geelong that I like. It's very much like Brisbane and the Gold Coast and Sunny Coast. So it's sort of class as a regional town, but you've got Melbourne there, but it's, you know, the amount of growth that's happening, it's all coming into one. The other thing I like is that the statistics around population growth. So Geelong is projected to get lots of population growth in the next five to ten years. Um, and it's just sort of an amazing stat today. The the um population boom that's going to be happening in uh Queensland is outrageous. So they're looking in the next 10 years, and I think there's drivers in this as well. Like, you know, there's lots and lots of infrastructure going in. Um, I know Cairns itself is, you know, they're projecting another 100,000 people, but we've got a massive theme park coming in here with just 220 million. They've just released plans for a billion dollar investment into the Cairns hospital. There's also other growth corridors things coming down in southern Cairns too. So that's all just infrastructure. Obviously, Olympics is, you know, a thing people talk about it's not a big drive, it's driving up property prices. Olympics alone, no. But the infrastructure, yes. And that's what creates the growth. Then you've got the demand. The demand of people want to move. You know, when I was in New Zealand, uh talking um to people about, oh, we think that we're going to get a lot of migration from um Australia to New Zealand because of our climate change policies and that it's going to be too hot in Australia, so we're all going to move to New Zealand. Well, three weeks later, it's 45 degrees, and I can sort of see, you know, in parts of Australia, I can see the logic around that. But I don't see that happening either. Um, people are moving to Queensland because of the cold weather in Melbourne in Victoria. So, yeah, there's many factors going around what what drives it. But population growth is a good one, uh, infrastructure is another major one, affordability is huge as well. But when it's coming to investments, you want to deep dive a lot lower into it to see whether our occupiers are, is that good investment? Where is the um, you know, the vacancy rates, are they higher or then lower? Why is that so? You know, um, where where's the hospitals going? The inland rail, you know, that just speaks wonders for Australia and um property investments. So, yeah, many are factors. I think you're right.

SPEAKER_02 18:19

There's so much to consider, right? But if we break that down into some core concepts, uh you touched on population growth, right? If if there's a lot of population going into a certain location, those people need somewhere to live. So supply and demand just plays its part. And look, we've got a lot of population coming into the country as it is. Um, it is extremely high. We cannot build homes fast enough, just to start off with, at a national level. So at a national level, there's a shortage. Listings at the moment are an available stock and market is about 18% lower than a year ago. So, in addition to the amount of demand coming in, there's also fewer properties available to buy on the market. And that's a national issue, right? So, in general, we've got that supply-demand imbalance. Secondly, as you mentioned, infrastructure, like infrastructure spending. If there's a certain location where a lot of jobs are being created, and Brisbane is a really good one, right? The amount of infrastructure spending that's going to be coming into Brisbane over the next couple of years in the lead up to the Olympics is going to be immense. The amount of jobs that are being created is immense. You know, people might have to move up to Brisbane because they're going to get a job to build the new stadium, for instance. So that all of a sudden drives more demand. Uh, and then there's a lot of interstate migration, as you said, people are running away from Melbourne for the warmer weather, right? Um, I did it. I think you did it. You ran up to Caes, Cairns, you went very far north summer. But we all ran away from the colder weather, right? And um, yeah, there's a lot of areas with interstate migration. You also touched on like country towns, for instance. If a hospital pops up, that is an immense driver. Like the amount of jobs being created, like compared to the size of the country town as part of construction, but also ongoing. The amount of demand for property just skyrockets in those locations. So at the end of the day, it comes down to economics 101, right? Supply versus demand, and what's really going to drive demand, and then what's the available supply. And as it is, we cannot build them fast enough. So we we keep on having the supply-demand imbalance, and it's identifying those locations where there's going to be an imbalance, where demand is going to outweigh supply, and ultimately it's just going to keep on you know putting pressure, upwards pressure on property prices. And then, as you mentioned, there's a lot of other stuff you can look at. But if we boil it down to supply and demand and the factors that drive demand, supply is always going to lag behind unless we we fix a major problem that we've got, then you're going to see those factors keep on putting upwards pressure on our property prices. And we're seeing that on a national level. We've got a two-speed market as it is at the moment, and you know, it's really those factors at play. So ultimately, you want to identify the markets that you know have those demand factors coming into them. And you can look at a cycle growth, you can look at trends in the market, but ultimately it's focusing on the fundamentals and focusing on what comes down the track and what's going to happen over the next five, 10 years. Because that's the market you're investing in. You're not investing in the market from five years ago, you're investing today for what's about to come. So, you know, you touch on a lot of those metrics that that sort of sit underneath that, but yeah, to try and distill that down to a very clean concept supply versus demand, you know, that's always going to give you an indicator of what's coming next.

SPEAKER_01 21:56

And also say that investing isn't for everyone. You know what I mean? There is an amount of risk in investing. Um and, you know, to be educated behind it, it's very important. But, you know, obviously we're buyers' agents, obviously, we're talking about investing and owner occupies and stuff like that. But I understand that it isn't for everyone. You know, some people just love to rent. They want to rent their whole life. I get it. Like you don't, it's cheaper to rent, um, depending on where you want to live. You can have a better lifestyle, but people also do rent vesting. So you rent where you want to live, you have a property portfolio as well, and you get to live the best of both worlds. Uh so I think my point is I'm trying to get across, is that mindset is a big thing when it comes to investing. So it's about having the right man mindset, not so much about the house, it's about where you're gonna buy and for your strategy. So, as you said before, like it's all about, oh, you know, I don't like the layout, I don't like the orange walls, I don't like this, I'm like that. Well, you're not living in it. You're you'd you're just getting a fortnightly or monthly cash check. That's all you're getting, and you've got to pay your bills and your property manager that by choosing the right crafting property manager, you can set them to get it. But, you know, it's literally as you said, it's a vehicle, it's a driver to create wealth for you. Let's not worry about layouts, less worry about locations and affordability and vacancy rates and capital growth and rental yields. That's that's what we do to create wealth.

SPEAKER_02 23:30

So, two points you touched on there, right? Proper investing isn't right for everyone. And I would fully agree with that, right? If you cannot afford to get into property and you cannot afford to invest into property, and it puts too much pressure on the cash flow, and there's a risk of you being, you know, kicked out of the market in a year's time because you can't afford an interest rate increase. That is about the worst decision you could make. Right? So, I mean, yes, we help property investors, we help people get into the market, but at the same time, there is a bit of caution around it, right? I've I've had someone come to me that wanted to get in, I looked at their finances and I said, You are spreading it thin. I would recommend you go talk to a financial planner first before you make this decision. And that person didn't like that response and they went somewhere else. But you know what? At the same time, I'd rather not help someone into a property that honestly cannot afford it and shouldn't be doing it, right? So if you're listening and you want to get into property and now is not the time, and now you're not ready, by all means take the time, save up a bit more, think strategically, you know, what can you do to get yourself to a point where you can safely invest into property and make sure that you manage those risks correctly. I'd rather take that approach than try and get into a property and have to pull out a year later because buying and selling is expensive. There's a lot of money that goes into fees on both sides of that equation, which means that ultimately you lose if you get in when you cannot afford to hold that property. So sometimes taking a step back is also the right answer. Now, again, there's a lot of people that can help you with that, but yeah, sometimes the right decision is not to invest in property, and it might sound very counterintuitive, but I'd rather have someone delay their property investment by a year or two and get in and stay in the market for the next two, three decades than getting in for the sake of it and then having to drop out a year later. A lot of that also comes back to better planning. Yeah, there might be another market you could get into that you never considered. And just understand that. Understand what the cash flow is going to look like, right? Don't go doing what your neighbor next door does just because they've done it, right? They might have received a million bucks in inheritance. You just don't know. So don't keep up with the Joneses, do what's right for you. But the second thing you touched on was um funky painted walls. And I think one of my best recent purchases were funky painted walls, right? Uh the people lived in the house, it was their own home, and the one wall was shocking blue, the other wall was shocking yellow. They painted it themselves, they didn't know what they were doing. There was drip marks running off the walls, but the house was sound, right? It was just the colours of some of the walls were questionable. I struggled to sell it. We picked that one up under market value, we had it repainted for three grand, and that place went up by 100k in six months, right? So I always say an ugly property typically makes a great investment. So I love ugly properties.

SPEAKER_01 26:38

Um the worst house on the best street.

SPEAKER_02 26:40

Absolutely. Again, you don't want it falling apart where it's it's sucking money out of you for maintenance. But if it's a good good structural property, sometimes if if the paints are bited or you know the colours are a bit odd, sometimes it's cheap to fix that. And a lot of people can't look past that. So I think we're very well trying to look past stage properties and um, you know, small defects that are easy to fix. It's the big stuff you should be should be caring about. But um, yeah, I love those deals. Uh no one else wants it, and I just see opportunity.

SPEAKER_01 27:12

I just did by myself, and uh there was cracks in the ceiling and you know, all this sort of stuff, and got done it, got it all looked after, and uh yeah, it came back, it wasn't structural at all. So perfect purchase. People prior, it was literally came back on the market. So in days of rough, it looked like forever, but I knew it was off the market to come back on the market. Um, because uh yeah, the last bite, what we were told is that they were scared off um by it and it wasn't structurally sound, um, that it was or that there was terabytes in it, it wasn't terabytes in it. Um so yeah, I was able to pick up a great deal um for my clients.

SPEAKER_02 27:52

It's time for the bolt statement of the week. So my bolt statement of the week is gonna be that if you're not ready to buy property, don't buy. Take your time and wait. Yes, the property market can do amazing things for you, but the last thing you want to do is get in and get burned. You need to have a well thought-through, risk-managed property investment approach.

SPEAKER_01 28:17

My bolt's name is don't focus on the property, focus on the location and your affordability and many of other factors within your strategy.

SPEAKER_02 28:27

All right, Cam, well, um thanks. I think it was a great episode. We uh we covered a lot, so hopefully our listeners get some value out of it. And we are gonna try and be a bit more regular with our recordings, get these out uh a bit more frequently. So hopefully got some value out of it. Smash like, subscribe, all those good things.

SPEAKER_00 28:52

Thanks for tuning in to the Bold Property Podcast. If you found value in today's episode, share it with someone who wants to make smarter moves in the property market. For more insights and support, connect with Carl at the Barnard Group or Cameron at the Way to Invest. Join us next week as we continue to break down the market and help you invest with clarity and confidence.