Virtual reality (VR) technology has enabled new immersive and interactive teaching and learning opportunities in the field of construction management. However, the effectiveness of virtual reality simulations used for instruction in this field is contingent on the design principles employed, and few studies have identified these principles. The aim of this research is to identify the key design principles for effective virtual reality simulations for teaching construction management courses. This study presents a systematic literature review that uses the PRISMA approach to analyse peer-reviewed literature on VR technology applications. The search strategy involved assessing major databases, including Scopus, Web of Science, and IEEE. Using search terms such as “virtual reality,” “augmented reality,” “construction management,” “building,” “architecture,” “simulation,” “education,” and “training,” publications from 2015 to 2023 were reviewed. Several key elements, including interactivity, authenticity, feedback, and alignment with learning outcomes, emerged as crucial design principles. This article contributes to the expanding body of knowledge on virtual reality in education by describing how to create VR simulations for construction studies using these principles. It also identifies areas for future research, such as how to better adapt VR simulations to the learning styles and capabilities of students. In conclusion, the study highlights the potential of virtual reality as a teaching tool for complex subjects.