Is this your first investment property?
If it is, starting locally is a good idea as you can keep tabs on the property a lot easier, meet the agents in person, view and maintain it regularly etc.
If you do want to look further out you can look rural, whether it be in Victoria or Interstate, rural opportunities are where, if you do it right, you can make good money, both in capital growth and rental yeild.
I bought a property in Gladstone (QLD) just as the LNG (Liquid Natural Gas) started going nuts and now the place has 2 or 3 long term LNG projects, is at capacity and will be for the next 7 to 10 years. I am getting great yeild and have made some good capital growth.
A good rural market here in Vic to consider is Warnambool. Also Hastings as this is the area planned for the Port of Melbourne expansion to be finished by 2020.
Anyway, enough rambling from me, if you have any questions let me knwo