An expert's ultimate new-year investment property health check

Investing in residential property requires regular evaluation to ensure those assets are thriving, says property investment company director Mina O’Neill says.

A “healthy” property isn’t just about collecting rent – it’s also about financial sustainability, tenant satisfaction and long-term growth potential. Here’s how to assess and maintain the health of your investment property.

Financial performance

A sustainable property investment starts with understanding cash flow. Although monthly rental income may seem like a good measure of profitability, true financial health requires a closer look. Deduct all expenses such as mortgage repayments, insurance, property management fees, council rates, land tax, and maintenance costs from your income to calculate the true net income.

If the result is positive, your investment is on solid ground. If it’s negative, consider taking action, such as refinancing for better loan terms or adjusting rent to align with market trends.

Invest in features that enable best possible rents, including modern kitchens and bathrooms, air-conditioning, built-in storage and pet-friendly spaces.

Capital growth

The value of an investment property often lies in its potential for long-term appreciation.

Look for areas with strong historical price trends, ongoing infrastructure developments, and proximity to employment hubs or lifestyle amenities.

Properties near new schools, medical centres, or transport links are likely to appreciate as they become more desirable to tenants and buyers.

Tenant appeal

A property’s health isn’t just about numbers – it’s also about the people who live there.

Maintaining high occupancy rates requires understanding what tenants want. Factors like competitive rent, a clean and well-maintained property, and proximity to essentials including  shops, parks and public transport are critical—but these apply primarily if you’ve already invested in an area with these features.

This is why it’s so important to invest in a good location. Outdoor spaces, secure parking, and energy-efficient features further enhance appeal.

Addressing maintenance issues promptly not only keeps your tenants happy but also protects your investment from more significant, costly repairs down the line.

Market position

A high-demand property is a strong investment. Low vacancy rates, frequent rental increases, and visible infrastructure growth are tell-tale signs of an attractive location.

To measure your property’s performance, compare your rental yield and property value growth to market benchmarks. Regular valuations and feedback from your property manager, brokers or accountants can provide valuable insights into how your property stacks up.

Sustainability

Sustainable upgrades including solar panels or energy-efficient appliances are no longer optional—they’re a smart investment.

These features reduce utility costs for tenants, which makes your property more appealing while potentially increasing your rental yield and overall property value.

Strategic planning

When deciding whether to renovate an existing property, it’s essential to align your choice with your long-term financial goals.

Remember, an older property can still be operational, and not every issue needs to be addressed immediately.

Repairs and upgrades can be made gradually, prioritising urgent matters first to avoid depleting your buffers. Although renovations can enhance rental yields and property value, expanding your portfolio geographically allows you to diversify risk and capitalise on growth in other markets.

To optimise your investment, take advantage of often-overlooked tax deductions, such as depreciation on fixtures and fittings, interest on loans and maintenance costs.

Working with a knowledgeable accountant ensures you’re maximising your returns.

A healthy investment property is a dynamic asset that requires regular care and attention.

Regular health checks, combined with informed decision-making and expert guidance, set the foundation for lasting success.

Mina O’Neill is the Director of Rethink Residential at Rethink Group, and co-author of the commercial property investment book ‘Rethink Property Investing’  (published by Wiley).