Thanks JacM: if I understand you correctly:

– say the bank wants mortgage repayments of $1,100 a month minimum
– say I pay $1,200 a month
– you're saying that I should put the extra $100 in an 'offset' account, which reduces the interest on the loan, but is available to me at call?

these are the apartments I looked at: http://www.ecosquare.com.au/

they're not serviced apartments: they gave me a list of the apartments, their purchase prices, and the rental income they'll guarantee for the first 12 months.

I have no particular reason to buy in or near the city: it's just that there seem to be these apartments available in this area that are relatively cheap, and with high rental demand and high rents in this area, it seemed it could be a good move.

and, no Amanda, I'm not buying to live in it: it's just for investment purposes

Thinking more about it (and this shows what a beginner I am): the point of me doing this seems to be that if I put a lot more towards the mortgage I could hopefully pay off a property within say 10 to 15 years, so after that (when I'd be in my 50s), the rent I get is just an income stream, which would help me out in retirement.

Though JacM says you should never pay off more than you have to. I also spoke to a mortgage broker about 3 months ago, who I recall saying that I shouldn't pay off capital, only interest. Though I'm not sure why it is that I should minimise my repayments?

I suppose the things to consider when looking at investment properties are:

– what is my likely rental income?
– what will my minimum repayments be?
– how much can I put towards the repayments in addition to what I get as monthly rental? (which determines how long it would take me to pay off the loan)
– capital gain counts too – so thanks to JacM and Amanda re advice to consider buying a property on land. Though it seems that an apartment near the city is going to get a higher rental returns than properties further out, though I could be wrong. On the other hand, it may be better in my case to look for maximum rental return at lowest possible purchase price so I can pay it off asap, and just have the rent as pure income. And not be so concerned about capital gain.
– I also need to consider tax implications, of course – whether I negatively or positively gear it.

I probably need to seek financial advice, and that was another thing I wanted to ask, can anyone recommend someone who'd be good for someone in my position? I've looked around but it seems a mite difficult to find someone appropriate for my sort of questions. Northern suburbs or the city would be good, but will go further if necessary…

Thank you all.