Certainly have a chat to your local council to understand the zoning of the two properties.  In other words, what would they allow you to build on them if the existing houses were knocked down, and a an alternative, what the minimum block sizes would need to be if you decided to carve them up into pieces and sell them off.  You'll also want to know what's under the ground in terms of pipes.  Easements and sewer pipes.  Such things are expensive or disallowed to move and can restrict what you can and cannot do.

With a P&I loan you are required to pay interest and a portion of the principal every month whether you want to or not.  Alternatively you could pay interest only and put the extra that you otherwise would have forked out per month on a P&I into an offset account against your P&I loan.  The end result is THE SAME.  In other words if you part with the same amount of money each month then neither option will see you paying more interest over the years than the other.  Here is where the difference comes in:

If you put your "extra cash" into an offset acount, you can withdraw it in large volumes at a moment's notice without permission.  This is good if you wish to use the money as a deposit for the purchase of another property.  Or indeed if your intention for the property changes (eg if it started out as a PPOR and you want to convert it to an IP later it is a very bad idea to pay off the loan or the bank interest will never be deductible on your tax return).  Remember also that once you hand money over to pay off the principal, if you wih to redraw on it or take a loan out against it, there will be fees involved.  In other words you are throwing money away.

As Terry always advocates, always go with IO with offset account…. UNLESS you are a person that cannot control your spending and don't trust yourself not to dip into the offset account for silly purchases.

You might want to consider that the 10-15km radius is not the only place – and indeed not always the place with the most – capital growth in terms of property values.  As such it might well be so that you could cast your net a bit wider in regards to schools.

I can speak highly of the dedication and performance of the teaching staff at Werribee Secondary College.  Further it is interesting to note that due to recent train timetable changes you can get from Werribee train station to Melbourne CBD in LESS THAN 45 minutes on the train.  I'll leave it to you to research train timetables to make your own decisions on suburbs within your search radius.  The freeways are choking during the peak hour commute so being within driving distance of the CBD is kind of irrelevant now.

Similar question to requesting this Saturday's Tattslotto numbers

Those areas have certainly enjoyed a big growth spike – probably due to their proximity to the already-existing Laverton Station which got upgraded, and proximity to the forthcoming Williams Landing station (and yet another due to be built in Tarneit).  Be wary of buy and holds from the perspective of vacancy rates, which are quite high in the area.

What are the public transport amenities like?  In other words, is there a train station that can take your tenant into Sydney CBD to the employment hub?

Sure can.

Example 1:
Let's say you buy a house worth $500k which grows at 5.5% per year.  After 1 year its value would be $500k x 1.055 = $527,500.  After 2 years its value would be $527500 x 1.055 = $556,512.50.

Example 2:
Let's say you buy a house worth $500k which grows at 7.5% per year.  After 1 year its value would be $500k x 1.075 = $537,500.  After 2 years its value would be $527500 x 1.075 = $577,812.50.

Can you see how the property that grows in value at 7.5% is worth more money faster than the property that grows at only 5.5%?
After the first year, house in example 2 is worth $10k more than house in example 1.  After the second year, the difference is more than $10k.  And the difference in their respective values becomes bigger and bigger each year.  This is because you are calculating a percentage increase upon a percentage increase, upon a percentage increase, upon a percentage increase etc.  This is known as a compounding effect.  

As others have pointed out, past growth is not a guarantee that the same thing will happen in the future in your chosen suburb, but it is a bit of an indicator, and can be related to the desirability of the area.  If a property grows in 40% in value this year, it will certainly not mean it will do so again next year.  It simply means that suddenly a bunch of people decided they really wanted to live in the area (for whatever reason – maybe the town got a new train station and made it easier to live there or something) and when more people are competing to buy things, the sellers can put the prices up and take advantage.

All this said, there is no point owning a place that you "think" will give you amazing capital growth if the rental yield falls way short of paying all the expenses and you find yourself forking out hundreds of dollars per week just to hang onto the property.  There is a balance  

Who is managing your property and why have they ordered aligning of doors without your say-so?  This is a non-urgent repair.  Check your property management contract and have a word to your property manager about your expectations. 

Green bins are normally optional and charged as an additional by council.  Call your council and find out if you indeed have an optional green bin.  Consider surrendering it unless you need it for your gardener to avoid tip fees for garden waste.

Normally the landlord pays council rates and as such the bin fees.  In a commercial lease the tenant would pay the rates.

It really depends on your strategy.  Some areas have great capital growth but terrible vacancy rates (ie high).  Are you looking to do a buy hold and rent … or a buy add value and sell?

I've attended a course under Stephen Tolle before.  Very knowledgeable chap, and very genuine. 

I agree with Jason.  When you offer you could say "Yes I'm happy to offer $?? with ?? day settlement – subject to building, pest, finance and all the rest of it mate"…ah

and then quietly add the precise wording of your clauses in the written contract.