The search for an Iaito after permission from your Sensei takes a lot of considerations. At least that was the case when I was allowed to look for one. You need to start thinking about the right length, which suits the style that you are practicing, balance, tsuka thickness, about what you personally like and what metal you Iaito is made of, which is closely related to the weight of your Iaito. This last question is I want to explore more thorough. For convenience I now assume that the mounting quality, materials and Ito are all the same quality and focus especially on the question of what material is most suitable for your Iaito.
The main features are stainless steel metal or Zinc / Aluminium.
The Iaito who are coming from Japan are almost all made of Zinc/Alumium. This has two main reasons. First, the law in Japan, they provide with a number of clear laws and Iaito's made of Zinc/Aluminium are exempted. The idea behind this is that forging a Nihonto is permitted only to an officially registered Japanese sword smiths which are allowed to forge two swords a month to avoid mass production such as in China.
In China their are no regulations but still the Chinese forges choose stainless steel because the know how about Zinc/Aluminum alloy is mostly not present and the great bulk manufacturers are not really concerned with the Japanese sword martial arts.
The second reason why Japanese forges choose for Zinc/aluminium is to avoid injuries on the joints and muscles because this can happen when you are training with heavy equipment. Stainless Steel and Zinc/Aluminium are having a different specific weight and so will have a different weight, so the steel you choose has a strong relation with the strain of your muscles. If you are building up muscles it is advisable to train with slowly increasing weights, because in fact you are using isolated muscle groups.
Therefore it is smarter and advisable to train first with a Bokken (wooden katana) +/- 500 grams, than an average Iaito, this will be between 800 and 1000 grams max, highly dependent on the length and finally a Shinken (sharp sword), depends on specification but will usually starts from 900 grams. To avoid such RSI-related complaints and injuries, it is advisable to follow this line.
As already mentioned, the difference lies in the fact stainless steel has a higher specific weight and therefore will weight over Zinc Aluminium.
Steel (alloy) Kg / m3
Aluminiun / Zinc 2700 - 3400
High Carbon Steel 7800
Besides the fact it stresses your joints, it is also better for your techniques to gradually increase the load. When you have other needs, such as to train in weight equal to a Shinken probably stainless steel may be more appropriate.
My advice is in terms of training material:
1) Bokken > Zinc / Alumium Iaito> Shinken
2) Bokken > Zinc / Alumium Iaito> Stainless Steel Iaito> Shinken
3) Bokken > Stainless Steel> Shinken
Most practiconers by the way will never end with a Shinken and their final destination is an Iaito, anyway it will not change anything in how to choose your blade.
Both of them requires minimal maintenance and will not rust. Also, you often see an artificial hamon on an Iaito, this will the case with both stainless steel and Zinc / Aluminum, this has to do with the fact they both do not undergo differential hardening. You will never have any contact with your Iaito so this is no problem at all.
Of course the knowledge and experience regarding forging Katanas and Iaito's in Japan is the largest. To improve your techniques as quickly as possible, it is important to train with a qualitative Iaito. Safety is an issue which is important in a Dojo and because the Japanese are highly aware of this the Iaito are also thoroughly checked there. With a large-scale Chinese forge this maybe less the case. Hanwei takes safety also very serious and checks their Iaito's very thorough. A Japanese forge is also aware of aspects such as balance, which is largely influenced by the length of your tsuka and blade, it is ensured that this will come out the forge in its right proportion. Of course, all Iaito have a Bo-Hi (longitudinal groove for the reduction of weight). The Hanwei Iaito's have been tempered correctly and therefore have a hard and robust blade. If I put it simple, Zinc/Aluminium is more light and you have less transition from Bokken to Iaito. Stainless Steel is heavier and more suitable if you want to train with an Iaito which has much more similarity in weight with an High Carbon Steel Shinken.
We want to offer as an advice and sales point the opportunity for a customer to choose between a Stainless Steel of Hanwei and Japanese Iaito from Murayama.
We could find ourselves in the cited point of view by Murayama and after extensive quality control, we then decided to work closely with each other.
Anyway my advice is also if vendors propagate very strong stainless steel or Zinc / Alumium this maybe especially from a sales perspective and not really concerned what the buyer of practicioners needs.
Please note also most traditional dojos only allow Japanese Iaito's.