Thanx guys for your views. To expand, I was thinking of a 3 bed house with the hope that downstairs was a granny flat style and that I could live there. I am about to start uni myself at 23 and aim to purchase the house mid 2012. So I had half a year at uni to find tenants who are not the stereotypical uni students. After your comments though I might lean more towards young professionals as tenants.

I was more interested in the implications of renting out the above house while living in a separate granny flat underneath. At Brisbane prices I might have enough for a cosmetic reno after purchase hopefully. This would get me a slightly better yield on the rented rooms of the house and allow me to do up the granny flat also. I am single and and granny flat would suit me to a T. The aim is to kill two birds with one stone. The drain of rent and at least most of the mortgage repayments.  Is it disadvantageous tax wise? And are there many other hurdles I don't know about? I was hoping to hear from someone who may have done it.
Cheers