Central Ballarat is a good place to buy. Look for a 3BR brick house in a quiet street near to town. A block around 800sqm with subdiv potential is advisable. Budget should be $300k - $500k depending on where/what you buy.
Gross Yields for Ballarat are higher than Melbourne, apx 4.5% and CG is predicted to be around 6% (slightly lower than Melbourne).
I've bought several properties for people there and they're very happy with the performance so far.
For example:
King Street South: Advertised @ $250k / Bought all-cash for: $219k, Renting at 4.8% gross, bank reval 6 months later for $260k.