by the way i obviously intended to say; if the council rates are $900 a year, then per week, it's $900/ 52. 

Why would you pay it off?  Just leave the money in the offset.  You might change your might about your strategy between now and then.  If the money is in the offset, the savings on interest is the same as if you'd paid it off anyway.

Wow your accountant should be fired.  If you are making a loss, it is a LOSS.  The tax department will not give you a full refund on your loss either.  Just a portion of it.  Why would you deliberately make a loss?

No, Laverton is not going to get a shopping centre any time soon, and the area between Old Geelong Road and Leakes Road will house a massive commercial park.  I have spoken extensively to Wyndham City Council about all this.  It is considered that the Williams Landing shopping centre will service the residents of Laverton.  To be fair, Williams Landing is not particularly far away.

Yes you are right about the land.  If you are ever going to want a backyard for your future kids to run around in, the sooner you buy it the better.  Land is going up in value faster than you could save for it.  So if you can, get yourself a house with a yard now.  It also leaves the option open in later years to subdivide and sell off the back yard when you no longer require it.  Or indeed build a dwelling in the backyard and rent it out for income in your old age.  This presumes there are no convenants/caveats on the title preventing this.

If I were in your position, I would be trying to do one of two things:

1. Get a house as close to the city as I could afford (eg Laverton), and close to a railway station
or
2. Get a house within a 5min drive of a Westfield Shopping Centre (eg Hoppers Crossing) – with busroutes to the train station

With a major Westfield Shopping Centre already in Hoppers Crossing with a major expansion on the cards, I cannot imagine Mister Westfield suddenly opening a similarly large centre just down the road in Derrimut.

Property values seem to go up in a nice stable manner around Westfields.  It is also the case that there is only a certain amount of land available near train stations.  It's not like they can make any more land…

If you are dead set on the Tarneit thru Derrimut area, stick to Tarneit.  It's getting a new rail station in a few years, is close to the Werribee Plaza Westfield, and has lots of schools including Westbourne Grammar.  History has shown that on the other side of the city, property around private schools performs well.

What are your jobs and where do you currently work?  This will have a big impact on where it is convenient to live… 

Have you looked at Laverton?  It's the last station in zone 1.  It has fast train links to both Melbourne and Geelong.  You can still get a 3br house for under $350k there.  You'd be just down the road from Altona which has Altona Gate Shopping Centre and a beach.

It really depends on your target market. 

If your target market is renters, talk to a few local letting agents about things like this:

Does a "study" attract additional rent?
What is the differential in rental return between a 3br and a 4br house?
How important to the renters for a property like this to have a large yard?  Do they prefer low maintenance, or large yard?
If they want a larger yard, why?  Is it for the kids to play in, or is it for a dog?  If it is the latter, how much extra rent per week will a tenant pay in order to have a house where dogs are permitted?  What extras would you need to provide for this?  eg higher fencing?

You'd get your answer to most of these questions by looking on http://www.realestate.com.au/rent  .  Ultimately it is about the bottom dollar.  If an extra bedroom attracts more rent per week than a family paying a bit extra for the allowance for a dog, then go the extra bedroom.  Also factor in how long each type of tenant stays.  If families with a dog stay 5 years, versus other types of families that move each year, you might opt for the longer style tenancy with a little less rent.

The resale market is another matter altogether.  You're not trying to squeeze weekly income out of every square metre of the property.  Moreso you're trying to appeal to the emotional homebuyer market… in which case a yard might be important.  Again, look at http://www.realestate.com.au/buy to see what is on offer in the area, and what seems to sell quickly.  Also ask local real estate agents about what local buyers want.

I suddenly have an interest in getting an iPhone

Hey reddahadyn, how is your project coming along?  It would be awesome to see progress pics if you have time to post them!

Townhouse – for the reasons you have already highlighted.  Note that sometimes a townhouse will be on its own title, and sometimes it will be subject to body corporate fees (eg due to shared driveways).  You need to ask that question when enquiring about a property.

If you pay off the apartment, the problem is that it will then be earning a positive income which will be taxed.

Get another property   The apartment is paying itself off anyway.