Property investment has long been the Australian dream but tax reform made in 2026 has seen huge changes to the way people look at the industry. While it definitely can still be a viable financial strategy, you have to make sure you’re asking the right questions before buying an investment property.
What’s your investment strategy?
It used to be the case that Australian property values just increased no matter what happened. Throw in negative gearing and it seemed like a sure fire hit, but that might not be the case in 2026.
When you buy an investment property you need to think about why you’re doing it. Is it purely for capital growth? Are you buying for the future – a retirement property or something for your children to move into when they grow up? Will you be stopping at one property?
With the market change dramatically this year, you should also think about things like the benefits of residential vs commercial property.
Depending on your strategy, it’s also worth reviewing regularly to make sure you’re on track. This is especially true given recent changes to tax law.
What are the supply and demand metrics?
Demand is one of the major factors for investors. If you have an area where lots of people want to live but there’s limited supply, it seems like an easy decision. But how long will those metrics be true? If there’s vacant land nearby or the opportunity for developers to build apartment blocks, supply could soon increase to match demand. When this happens, the rent price and value of nearby properties can be hit.
Will rent keep up with costs and repairs?
While rent isn’t the key factor for many investors, many do use it in their calculations. Rent in today’s market might cover regular costs like strata and repairs for wear and tear, but if you have to make major changes or demand for an area drops, will you be able to budget for this?
How important are factors besides location?
There are plenty of ‘property gurus’ online who will tell you (for a small fee, of course) about their secret formulas that will guarantee profit, happy times and rainbows. Most of the experienced investors will tell you though location is by far the most important factor.
Somewhere that looks good over a few years might be attractive on paper, but the tried and tested locations – big cities, towns near beaches or other major attractions – will always have a rental demand. Having facilities within a 15-minute drive is often a good rule of thumb for a nice liveable area.
Location is also important if you ever want to check on the property or live in it. Buying on the other side of the country might have financial benefits, but they might not be as practical.
How much capital growth will there be after your expenses?
Most investors are in it for the long-term growth but just because you think you’ll see profit in 20 or 30 years, how will your day-to-day life be impacted by taking on extra responsibility. If the rent is covering all your expenses (see above) you might be fine but if you have to cover expenses regularly you have to budget for that over the course of your investment – and how things like rate rises, job loss or other changes will impact that.
Will the investment look smart if tax rules change?
Earlier in 2026 Labor announced sweeping reforms to capital gains tax and negative gearing that made a huge change to property investment in Australia. These changes have benefitted first home buyers greatly but have disrupted the cash cow of investment.
No one saw it coming and it’s changed a lot of strategies and goals. Being aware that these changes are possible is important. Would your investments be profitable if we saw further changes?
What’s the household income like near the property?
A lot of investment advice tells you to look for bargains. Whether that’s because you can upgrade them easily or wait for the inevitable growth changes by the website/account, but it’s not always the smartest move.
Some properties are cheap for good reason. If you work on a home and add lots of value to a house in an area people don’t really want to live in, it may be wasted capital. On the other hand, buying in a more expensive location where demand is high (and is always high) means that you can ensure renters and strong interest when you decide you want to sell.
Do you understand tax rules for repairs and improvements?
Many aspects of property ownership catch people off guard when it comes to tax time. Knowing what you can claim for and the different rules around repairs, improvements and other realities of property ownership can hit hard. Making sure you have a financial professional on your side (ideally from before you even approach a mortgage broker) is vital.
Once you’ve had that discussion (with an accountant, financial adviser or similar) and everything is to your liking, it’s time to start looking. Reach out to our team of mortgage brokers and we’ll help with the financial side of things, while your buyers agent, conveyancer and building inspector take care of the rest.
