What's your goal in buying property? It's a bit difficult going on your limited info. You can buy in many areas of Sydney for $750K.
We all want capital growth but it can't be guaranteed. If you are too negatively geared any growth is quickly eroded and you find yourself going backwards very quickly.

Maybe look at 2 cheaper properties with a better yield.
Everyone has their own strategy. Even the "experts" disagree. Some saying only by within 10km of the CBD, others saying buy out west for better yield etc.
You need to decide what's best for your strategy and which will get you closer to your goal.

Tax deductions are all well and good but remember they are the icing on the cake, they are not THE cake.

If she signs the agreement (A MUST) then the laws apply. If she's late with payments she gets notification (after 14 days). But having said that the courts do often favour the tenant.

If she's been paying for 12 years, why would she stop now?

What's the difference in what she will pay and market rent? Why are you supplementing her income?

I know it's difficult when you meet the tenants and they are nice but you need to think about the money out of your pocket and into hers. But also take into account- if she did move out how much would you have to spend to get it up to rentable condition? How long would it take (with the extra rent) to get your money back. If there's a fair bit of work and the extra rent is not huge it's probably easier to leave her there.

I was asking the poster where HER rent goes and where HER bills are paid to and from if she doesn't have a specific offset or LOC.

I live in Sydney (baby boomer) in a big house. Would like to downsize a little but have too much junk.

I wouldn't mind a duplex (owning both and renting half and living in the other half). I'd like a bit of a yard but not the massive one we have now (not that I do lawns- or pools). If I find the right block that's what I'll do.

Strata fees are a deterrent for me for an apartment plus privacy. I doubt I'd ever leave Sydney.  

If you are going to use the equity to buy another property go to the bank and apply for a loan (as they requested). Then they will do a reval to assess your borrowing limit.

When you apply for the loan give them details of your current house eg cut and past pictures of similar houses from RE.com showing the price to show what your is worth. Explain that you have renovated and is now worth $XX. Put pictures of your house with reno pictures.

When I applied for more money (LOC) they revalled one I had only bought 2 months earlier. I didn't request it. They onkly valued it at 10% more but that's Ok I only spent $5K on the reno. It is worth more than that though.

So everyone here is predicting every area in Australia will go down? haha. Yeah I'll wait for that.

 In the meantime I'm making money buying undervalued properties because on the news they said GFC2 is coming.

Advice- don't watch the news. Do real research into what's happening IN THE AREA YOU WANT to buy. Get educated that way you won't be swayed by people who believe everything they hear on the news. .
Some areas will go up, some will go down.
Most of the time it's financially better to rent AS LONG as you do something productive with the money you would be putting into a mortgage (if you had one).
Another idea would be to buy an investment property. But I wouldn't advocate buying and hoping for capital growth, Hope is not an investment strategy.

You don't have to refinance. Just get a LOC from the same bank (they have the deeds so you can't use that property with another bank). As mentioned- get the new stand alone loan with another bank if you like. I like to have a few with one bank so I can get 1% discount.

Yes but I'm CF neutral now so no longer need to. I used to top it up as needed.

Well I don'e see at it as a hole (but it depends what you buy). Sure you may be CF- but if you buy right that won't be for long and you should have extra equity in your purchase.  I buy, reno, hold. I vuy places under market value and add value by reno. This also increases the rent to where they are CF neutral or positive. I don't need to but if I wanted to I could revalue the property and up my loan then take the money back out and put it back in the LOC. With this strategy you can keep buying forever. As soon as one house is finished I get approval for the next.

I don't believe in buying a negatively geared property and hoping for CG. That's where you could get yourself into a hole as you would be paying money out of your pocket each week and going backwards.

If you don't use the LOC where will you get the deposit? If you have to save for a deposit each time you will nevber get beyond 2 properties. You need to change your thinking about using other peoples money. I've borrowed all the money from banks using LOC and loans. I had no cash. But with good buying and adding value through reno and CG I'm not highly geared.

A mentor can be a great asset but you need to be careful.
 There are a lot of places offering mentoring. Some are franchised off and some of the "mentors" have not been in the game that long.

With the ones touting their courses there are differing levels also. There is BIG money in selling your system with a 3 day workshop. Average around $6,000. Sometimes there are 50 people at the 3 day workshops That's a cool $300K (minus venue costs etc) but still not a bad deal.
It's quite comical watching how they hype people up with their "only 19 places left at this price". "book now and also get a set of steak knives". etc.  But it works. Watch the people run to the back of the room to sign up. Some sound so wonderful how could you not believe you'll make double your money back on your first transaction.
Maybe the presenters get a buzz out of it. I know I could talk property till the cows came home (showing my age now). I'd love to run seminars and teach people about property (except I don't know enough and I hate talking in front of people). haha small hurdles I know. .

The thing is everyone wants the easy road, get rich quick scheme. Not that I'm saying they are all that. Most have really good ideas and strategies but it would be interesting to know what % actually follow through and make money. It would be pretty small I think.

I think it's better to start with what you are comfortable with, instead of some hair brained scheme, then step up to the next level.

Having likeminded people around you is definitely a huge advantage. Join a club or go to meetups etc. That's how I got motivated to get moving. When you meet people just like yourself you think "if they can do it so can I". It's as simple as that. Most people are willing to help others get started. I think a lot of the big guys are just like that too.
Actually I think it's funny that others don't take advantage of those around them. I went to a weekend seminar last week. Sat next to many different people, both in the lectures and at lunch. You say hello. People don't talk. I'm always asking what people are interested in, what strategy the are following etc. Lots were beginners. Very rarely did anyone ask what I was doing or investing in (maybe they thought I wouldn't know anything??). Silly misconceptions robbed them of maybe finding out something that could have helped them on their way.

Reading books is great but talking with people that are doing it is very powerful. There's a quote (which I can't find) about half an hour with a learned man is worth a thousand books (something like that).

Unit? House?

CG returns? rental returns?

I know someone that just bought a unit there $1M – rents for $600pw. good for tax deductions I guess.

That's going to need some SERIOUS capital growth to make up for the loss every year.

 Not my cup of tea though. I like to make money.

As above. There are many types of property and different reasons for buying them.
Read, get an idea of what YOU want to get out of it. Cash flow, capital gain etc.
This will help you determine what and where you will buy.
Keep asking questions as you go.

South West Sydney is as good an area as any to start if you feel comfortable with that area. Go to a few open homes to see what's around.