If you’re planning to rentvest, the hardest part isn’t the strategy — it’s choosing where to buy.

You might understand how rentvesting works. You’ve weighed up the pros and cons. But when it comes to picking a suburb, things can quickly feel unclear.

In this episode, we break down why location isn’t just one part of the decision — it’s the foundation of your investment. Many buyers focus on price, familiarity, or rental yield, but those factors alone don’t build long-term wealth. We explain what actually drives capital growth, why cheap doesn’t always mean better, and how the wrong suburb can quietly hold you back for years.

You’ll learn how to assess locations properly, what fundamentals to look for, and why “hotspot” advice can be risky. We also walk through key considerations like buying locally vs interstate, houses vs units, and how to balance tenant demand with long-term growth potential.

If you’re considering rentvesting—or you’re stuck trying to choose where to buy—this episode will give you a clearer framework so you can move forward with confidence.

Episode Highlights

01:50 - Why Location Matters More Than You Think

02:38 - Rentvesting Explained Simply

05:01 - The Biggest Location Mistakes Buyers Make

06:29 - Why Cheap Property Can Cost You More

09:06 - Why There’s No “Hotspot” Answer

11:06 - What Drives Long-Term Property Growth

15:54 - Tenant Demand vs Growth: Getting the Balance Right

18:31 - Should You Buy Local or Interstate

22:00 - How to Do Due Diligence Anywhere

23:27 - Houses vs Units: What Actually Matters

26:21 - The New Build Trap Explained

27:17 - Timing the Market vs Choosing Location

28:16 - How to Choose a Location Step by Step

30:27 - Who Rentvesting Is Right For

31:59 - Risks, Buffers, and Long-Term Thinking

35:07 - Final Thoughts and Next Steps

Course Details:

• THE First Home Buyer Course is our Step-By-Step, No BS Guide to Every Stage of The Home Buying Process – It’s the next best thing to having your own buyer’s agent. With our expert guidance, you’ll know what to do at every step along the way. Become a home owner faster and easier. Click here: https://homebuyeracademy.com.au/YFHBG

If you enjoyed today’s podcast, don’t forget to subscribe, rate, and share the show! There’s more to come, so we hope to have you along with us on this journey!

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Veronica: The biggest mistake buying based on price, familiarity or hype, cheap doesn't equal growth, and high yield does not equal wealth if the area doesn't have strong fundamentals behind it. Your equity that is the value of the property can stall and that limits your next move.

Meighan: When you rent-vest, your property has one job. Perform as an investment first. Now that means real growth, drivers scarcity, and strong demand, not just something that rents really quickly.

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Speaker: Welcome to your first home buyer. Guide the podcast for first home buyers who want to feel confident, smart, and totally in control of their property journey. I'm Veronica, and that was Megan. And yes, we are probably old enough to be your mom's, which is a good thing because between us, we've got decades of experience and we've got your back every step of the way.

Speaker 2: Our mission to cut through the Bs, keep it real, and make sure you are buying smarter, not stressing harder. Quick heads up. We've created the First Home Buyer course, our step-by-step program to help you buy your first place with confidence and without the costly mistakes. The links in the show notes, but stick with us first.

Speaker: You'll wanna hear this episode. I.

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Veronica: We're also excited to share that we have relaunched our $39 Where to rent-vest tutorial, which is designed specifically for first home buyers who plan to invest before they buy a home to live in.

Meighan: Yeah, this is a really small part of step three, which is planning in the PACE system. Now, remember, pace is preparation, action, commitment, and execution. Step three, planning a big one because you really need to know where you are going before you start out on your journey.

Veronica: Alright, so quick refresher. What. Is rent investing? The first time you've heard the term it probably isn't, but just in case it is. Right? It is buying an investment property in a location that makes financial sense. It's renting where you wanna live, so usually it's chosen by people who can't afford to buy a home that they need in the area that they wanna live in.

Wanna be there long term, for example. So it also can reduce the compromise on both lifestyle and long-term growth. So it gives you more flexibility in a different way.

Meighan: Look, we've covered a few of these things in the past, Veronica, but we haven't really covered where. ~Um, ~and that's very much why we, we created the tutorial because we get. Asked the question so many times. So we've covered in the past, you know what it is, what is rentvesting? You know, you've mentioned it before, but we've also talked about who it suits and who it doesn't suit.

Every purchase has some risk. And trust me, you know, I was just talking to my team in our team meeting, um,~ um,~ in our buyer's agency in Brisbane yesterday, and,~ uh,~ one of my team is, is looking for his next property. He's doing the Stepping Stone strategy. And he was saying, you know, I, I, I still feel nervous even though this is not my first purchase.

Veronica: All right, so the biggest mistake that rentvesters make is where they buy based on familiarity. So they buy based on, oh, I know this suburb, which. Sounds safe. Feels safe. But the reality is, if you are buying purely for investment, you need to look bigger than that, right? You got a whole country to choose from really.

~Um, ~also, investors quite often will make a mistake based on price alone. so it feels safe and good and less risky, right? ~Um, ~hype. Everyone else is buying in an area, it's booming. So I want to jump into that market. ~Um, ~I don't want to miss out. that's probably one of the biggest mistakes that investors, and this is not just rentvesters this is investors generally.

And also focusing on rental yield without understanding growth drivers. And particularly for first home buyers, this is a real danger. ~Um, ~because for two reasons. One is because you need capital growth because you're at the beginning of your, Home ownership journey, and you need this property to do some heavy lifting for you.

So these are really important thing for first home buyers to be considering.

Meighan: Yeah. I just wanna pick up, you said price alone is one of the, the biggestest mistakes that rent make and, and I couldn't agree more. You know, it's cheap, so it must be good. We've, we've done for. A free webinar,~ um,~ um, that people can download off the website totally free. And it talks about,~ um,~ the difference between buying at different price points and what that can lead to.

It was luck that things worked out for you. But ~um, ~no, it is important not to try and just buy cheap when you're rentvesting. It's to buy quality. And quality isn't always cheap. In fact, often it's not. Now, that's not to say to stretch yourself above and beyond your means, but it is to say don't limit yourself if you can buy a better quality asset.

Now, the hard truth is cheap does not equal growth. Right. Just because it's cheap does not mean it's gonna grow,~ uh,~ exponentially. ~Um, ~and there are so many examples of where that hasn't happened. And the other thing is high yield. It doesn't equal long-term growth, high rent, so rent,~ um,~ versus the purchase price of the property.

Veronica: So if you buy in the wrong location, you can stall that growth in equity and that. Equity is the amount that you own, right? That is the bit that you can then use to buy another property, for example. Or if you sell that property, that is what you get to keep, you know, that's, that is what you own of that property, and you need that to grow to make sense, right?

And so if you're buying the wrong location and it doesn't do its job. You might not get an increase in equity or might go backwards. So, and all that does is limit your ability to buy. Again, it limits your ability. If you are actually thinking, well, at some point you're gonna sell that in order to buy the home that you really wanna live in, it limits that ability.

Meighan: And it is important to understand risks and, and, and what not to do. But let's talk about what makes a good rentvesting location now be. We warned we are not giving you a location to buy in in the tutorial. That's not what it's about.

It's giving you the framework to work out where to buy with your criteria and, you know, matching that and budget with,~ um,~ fundamentals in, in areas. Okay, so it's, we're not gonna give you the magic answer.

Veronica: Let me add to that. The reason A, there is no magic answer 'cause it's different for everyone. But these things change. If I gave you a magic answer for what was right today,~ um,~ there are. We talk about market fundamentals, the property locations that are good long-term plays, right? So some of those won't necessarily change, but there are, there's ones they shuffle in the order on whether the top of the list or not, right?

So it is a process that you need to

Meighan: if it's a hotspot, and I put that in in com. Us 'cause you and I do not ascribe to hotspots we in, we ascribe to long-term investment fundamentals. But if you are given a hotspot to investment, invest in, be very careful. There may be an underlying reason why someone's suggesting that. And it might be that they've bought there and they wanna get capital growth quickly.

Veronica: Or they could be that, or it could just be that they're, they're silly and they wanna make themselves feel better because other people do the same thing they do. But the, the thing is though, that, you know, anyone who tells you a place is the next place to go off. Well. Fundamentally, that's a very bad advice.

It doesn't matter who's giving you that advice. And when you get that advice, do not take it. Go and do your own work and your own research. What we teach you is the process to do that, and you can use that over and over again. It will work today. It will work in 10 years time. The process doesn't change.

Meighan: So what is a good ~ uh,~ location? It's strong long-term growth drivers. You can see here, we're not talking about rent income, right? As the main reason to buy an investment property. It's proximity to employment hubs, you know, not just one, not not a single income town or a single econ economy town, like a, a mining town with nothing else.

We're talking about. Multiple employment hubs. So different places where people can be employed, infrastructure that supports economic activity, not just announcements of what's coming up. 'cause that can change. ~Um, ~funding may be,~ uh,~ not acquired from, from different levels of government. Or there might be something that stops that, that development.

So.

Veronica: Or it takes decades. Honestly, we've, we. Getting a second airport in Sydney, but honestly, it's been on the table for 30 years.

For now, one thing that people don't think about when they're buying an investment property is owner occupier appeal. And it sort of sounds counterintuitive, but it is really about if you are looking for capital growth, you want your future buyer pool to be quite big. So you don't just want other investors, you want owner occupiers who will pay a premium for the property when it comes time to either be revalued, to use the equity or to sell,~ um,~ and maximize your, your capital growth.

What is the tenant pool that I'm aiming for here and what is the future buyer of this property? It's probably not you.

Veronica: Or it might've been you 15 years ago or 20 years ago. Can you, can you have cast your mind back to then, would you have been happy with that then? So the, the owner occupied appeal is really interesting actually. And, and it is counterintuitive, but it is so fundamental to this. And, you know, I was actually just thinking about this the other day because everyone knows, we talked about our rules episodes a few, few weeks back we had our rules episodes, and one of the rules was, you know.

Never buy strata property, which listen to that episode, that is not a rule to follow. You gotta understand context, right? You know, I'm not saying never buy, but one of the reasons I think that units have underperformed houses is because there's been so much really shitty invest. The stock that's been built, that's been sold to investors.

And the other fundamental thing is scarcity. Right. So when you are buying a property, we're talking about buying in high a highrise apartment or buying a house and land package in, in a, in a outer suburb where there's just, there's gonna be endless supply of very similar properties and another suburb's being, you know, being built next door.

That is not scarcity, right? What you're trying to do when you're buying a property is find something that is not cookie cutter that. Has demand and, you know, has a land component. And that's gonna vary depending on location. There is that limited supply of that type of property. So a buyers come in, they go, they won't go, oh, it's all right.

You can be too far and you've gotta have to drive and fight for parking, or it can be just right, you know. So every suburb, every area has its desirable positioning, and these are the things that are really important and, and, and lend itself to scarcity.

Meighan: ~ um,~ um, it's. Interesting one, walkability to transport because it does differ location by location. So you have to, you have to understand the nuances of the area that you're buying in. So I know in Brisbane people will walk 800 meters to a, a bus. ~Uh, ~that's on a, a reasonably direct route, but they'll walk a kilometer to a train.

So, you know, and that's very unique to Brisbane. It's different in different,~ um,~ locations. So that's that sort of, you know, once you get your general area that you're looking at, diving deep then into the individual property, it's a whole different set of, of criteria you need to focus on. This is the high level bit of kind of generally where, so the next thing that we want to, ~um.~

So it, it got.

Meighan: from and people really like them. Yeah.

Veronica: And, and, and yet a lot of investors go, oh, I've gotta buy where there's lots of tenants. I go, mm, I don't know about that.

Meighan: It's, it's getting the balance right, ~uh, ~between owner occupies and tenant demand. So the tenant demand needs to be there, but not too much of it, that everyone's just sort of putting down the pressure on prices. The next thing is good transport links. ~Uh, ~so we talked briefly about how far looking at in a particular location, how far people will walk to public transport.

~Um, ~but this is particularly important because you could be close to a train line. A long way from a train station, and that's not necessarily a good thing. ~Um, ~the line may, may impact, you know, noise, there might be a noise overlay there, but if people can't walk in a distance that they feel is appropriate for that town, then it's, it's gonna be a bit of a problem for you.

If there's not much to do and it's a bit of a dead, dead place, then you may not see much in terms of growth in population. Or you may see negative population growth as people leave because there's nothing to do.

Veronica: Yep. And here's the nuance. You're not just buying something that rents easily, you're buying something that grows in value. Right? And that's, that's the thing that a lot of people when they're rent investing, forget. They just think, oh, I've gotta get something that rents easily. And it's like, that can, that can be really cost you in the long term.

Meighan: Yeah, so let's have a look Veronica, at should you buy in your own state or should you not buy in your own state? Depends what the question is.

Then, you know, or if it's in your city, somewhere else in the city, perhaps, or somewhere in a, in a satellite city. So say in Sydney and you might think, oh, maybe I'll invest in Newcastle, for example. You know, that's, that's a very valid,~ um,~ thing to think about. Obviously the pros are that it's easier to inspect.

You can actually get up there on Saturdays. ~Um, ~you can keep, you need to be able to look at, inspect a property, right? If you're gonna buy that property, like, don't buy remotely, you know, you're familiar with the area to a degree. So, and you can get up to speed a lot quicker. And there is a comfort factor.

So there's some of the pros are buying locally.

Meighan: Yeah, there's also some negatives, Veronica. ~Um, ~and I, I might just backtrack to your point there about don't buy remotely unless you have engaged a buyer's agent to do this on your behalf

Meighan: physically inspect it

Veronica: oh my God. Honestly, the, the amount of buyers agents there out there that will buy and remotely do not do that. You will know more by doing our course than those buyer agents know.

Meighan: Yeah, so that, that, that's the, that's the caveat on that is you can buy remotely as long as you have a professional who knows what they're doing with local experience, who is inspecting the property for you and knows the local area. Now, let's have a look at the cons of. Buying in your own state or in your own backyard.

Sometimes there's an emotional bias and you think, I really like this area, therefore it must perform very well because I wanna live here, so why wouldn't everybody else? ~Um, ~it also can sometimes lead to overpaying in overheated markets. Now there are some very overheated markets in the country at the moment, Brisbane being one of them, and first home buyer.

Big spike in popularity from investors coming from other places. So, ~um, ~and if it's your own backyard, just be really, really careful that you're not choosing that backyard and o overpaying,~ um,~ just to get into a comfortable place. There's also limited options if your city is expensive, you know, it's really hard, Veronica for,~ um,~ a rent investor, a first time buyer to buy in Sydney.

It's, you know, you, you're sort of getting pushed out and out and out, and then you've gotta wonder whether, you know that's the right location to buy. The further out you go or if you should be looking further afield. So don't just limit yourself to buying in your backyard because it feels comfortable.

Veronica: Yeah, look, I think you do have to understand how to read data because the, the reality is that if you're buying away from area where you are familiar with it, local dynamics, you're gonna have to, you rely on data to, to build up that knowledge, right? But that is not enough, right? You do have to then build local knowledge,~ um,~ or buy that local knowledge, as we mentioned earlier, in terms of engaging a, a buyer's agent.

And you also need to have very clear criteria,~ um,~ on what you're looking for and understanding what. That criteria is of a good property in that area. And that varies, you know, what's considered a good property in one area will be very different consideration in another. Again, it's about owner occupied appeal.

So you gotta look about what is valued in one area versus another, and proper due diligence, the buying process as we teach you in the first home buyer course. So if you do the full course,~ um,~ we teach you the due diligence that you need to do for any property that you're buying, but also. In any state or territory because the problem is that the laws are different, the buying process is different.

It's very unlikely it's gonna be, there's some similarities, but mostly there's some glaring differences. So you have to do proper due diligence. You have to know what that proper due diligence is. So it's really important.

Meighan: Absolutely. Let's have a look at houses versus units for rent. Festing, you know, again. Do. Some people will say, oh, avoid units and townhouses at all cost costs because you've got strata. You know, it's one of our rules that we spoke about in, in our, our two part series on the rules of property. ~Um, ~you know, but again, it depends.

You know, generally speaking, houses have a stronger land value and longer,~ uh,~ better, longer term capital growth. Now, I said generally, because you can get it wrong, if you choose the wrong house, you could really underperform

So it, it's just not a rule that the bigger the piece of land, the better the long-term growth. It, it really isn't.

Veronica: It can send you down a absolute logies chase that one. And the other thing is that that units do offer a more affordable entry point, but you have to be very selective. ~Um, ~and you know, we've talked about that in the rules as well in many other episodes. ~Um, ~certainly, you know, in Sydney, for example, a well well placed unit in a really good.

So you've got to, you know. Horses for courses, right? Whatever you buy, we don't want you to buy a dud. So if you're buying units, you gotta be thinking about boutique blocks. You gotta be thinking about scarcity, and you've really gotta be thinking about avoiding those high density investor heavy complexes.

Meighan: Yeah, and this is where a lot of first time buyers get it wrong, especially when they're tempted. Buy shiny new developments. It feels like it's really low maintenance, really easy. Gonna rent really well. ~Um, ~and depreciation bene benefits. Now it, that can be a real trap. When we talk about depreciation.

It's one of the tax,~ um,~ incentives that is available to investors and the newer, the property, all other things being equal usually,~ um,~ the higher the depreciation benefits, so kind of cuts your taxable income using a particular formula. ~Um. ~Not gonna go into it here. I think we've done an episode on,~ uh,~ I think within one of the rentvesting episodes.

Veronica: And look, the other thing to consider is timing versus location. I did mention earlier about, you know, market forces and market conditions, and Megan talked about trying to avoid buying in an area that is overheated, particularly in the first time buy segment. So. Timing is important, but you will hear people saying things like, it's all about timing the market.

Well, it isn't. It is not all about timing the market because the reality is that none of us is in control of the market, right? We can't consistently time markets, but we can choose quality locations and, and when you are investing. You have options. you know, when you're an owner occupy, you sort of, you have to suck it up, you know, like you choose your location, you have to deal with whatever the conditions are at the time.

Meighan: Yeah, absolutely true. Now this is why we created the $39 tutorial cheapest chips. ~Um, ~but lots of information, a great framework. You can use it over and over and over again. ~Um, ~it can be used in conjunction with doing the course. So it is a. A part of the course, but you can, you can do the tutorial, get to know us, you know, how do we, how do we teach?

Do you like our style? Test us out. But we, we keep seeing the same pattern, and that is first time buyers understand a. Why rentvesting works, but they freeze when it comes to choosing a suburb. So they kind of get the idea and the strategy, but then they're a little bit paralyzed by the, 15,000 suburbs and localities around Australia.

Veronica: No, and there's also a lot of noise out there that. He's tempting to think, okay, I don't have to do the work myself. I can just shortcut and, and listen to what somebody else, some influencer is saying, or some buyer's agent is trying to, to sell the idea of a, a particular location. So we actually teach you step by step, a tutorial.

It covers and it's a process. Everything's a process. It's not onerous though. It's very simple once you understand what's involved, right? But so it's a simple. Step-by-step tutorial covers how to shortlist states and cities. So sort of narrow it down again, let's get that 15,000 down to, I don't know, 300, and then whittle it down from there.

What data actually matters, how to analyze suburbs properly, the red flags to avoid, how to compare options objectively, and some case studies of real examples.

So for anybody looking to, to purchase outside your backyard, this is great. Because it direct, it directs you to the right people to talk to as well. It's affordable, $39. ~Um, ~it's designed specifically for first home buyers, not seasoned investors with huge portfolio. It's right. So we are really breaking it down to an understandable format that you can apply over and over against $39, a small investment to avoid a very expensive mistake.

Veronica: So it's truly perfect for you if you are a firsthand buyer price. Out of your preferred suburb. If you are wanting flexibility to move for work, you don't really need to buy something to live in for long term. Right. And also with couples where, you know, one partner or maybe both of you, they're not ready to settle down.

Like do not go out and buy a family home before you ready to buy a family. Unless you're within a really short, you know, short timeframe of that, like, and also buyers who sort of, they wanna build equity and they're thinking that long term I'm gonna be able to build a portfolio.

It's so funny though, you know, ~um, ~and I've been talking to my gym instructor, I've mentioned it, my gym trainer, I've mentioned, I think I've mentioned him a few times on the podcast. I told him yesterday morning that I've been talking about you on the podcast, and so he's like, which episode? Which episode?

I'm like, well, listen to all of them mate, and then you'll hear them. But he's, he's like going. Oh, so if I learn this and things go well for me, I will be able to go back to it and use it over and over again you know, do as I was successful. As I upgrade my property, as I buy another property and investment, I'll be able to, and I'm a hundred percent you will.

This is knowledge that is, is an investment in your financial future. Like even the 39 bucks is, but the nine 90 of the course absolutely. Is so, so this, so Nick, that's for you.

Your future might look like because you want, you don't wanna limit yourself. Go back to the episode where we talk about the, the pros and cons of rentvesting. So important to understand what questions to ask. Buffer planning, again, incredibly important. You don't wanna max yourself out and be, you know, missing out on your avocado on toast or not being able to go away on holidays because you've maxed yourself out.

Also, understanding your cash flow. ~Um, ~so at the moment in most localities, rents are increasing because of the pressure of the demand and the lack of supply. But you do need to understand if things, if the rent. Don't increase one year if they stay stable. If you've got some vacancy, if you've gotta do some repairs on the property and you need it vacant for a period of time, you gotta understand how that affects your cash flow.

Again, it helps you sleep at night, but you've also gotta have a long-term mindset, right? This is not about buying, flipping rent. Vesting is not a flipping strategy. It's not a short term strategy. It is about the long term because it's the the capital growth and the compounding nature of capital growth that you really want to take advantage of.

Veronica: Yep. And look, we covered all of that inside the first time by course. So do the rentvesting,~ uh,~ tutorial, by all means. But if you really wanna do it, well, strategy without structure is really risky, you know? So it's great to have that as your strategy. And if you decide you're gonna go for that way, then, then learn how to do it properly.

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Speaker 4: Thanks for joining us. If you've enjoyed this podcast, we encourage you to join our Facebook group. It's called Your First Home Buyer Guide Australia, and it's your opportunity to connect with us and ask us your questions, which we will answer, meaning you can make sure that you are not getting led down the garden path.

We hope to see you there soon.