Hi Jesse,

Personally I like real estate to invest in, and positive real estate as I don't plan to sell, the capital growth (the price it cost to buy) 

is not the most important thing.

My advice is

decide if you and your partner are going to live in the first house, if you do for 6mths you will be granted the

first home buyers grant which could help with your deposit not sure where it sits but either way a few free K is better than nothing

now set your goals realistically, you can't buy mansions straight away (unless you are completely loaded) and be positive geared

positive geared is where a property Makes you some money to work out if a property is positive geared you need to know 

rent value, landlord insurance cost, mortgage repayments, the cost of rates, agent fees of you aren't self managing, and budget a bit of money in for repairs

or un tenanted weeks.

i personal get the year worth of bills divide by 52 there's the cost weekly than I take 45 weeks of  rent and dived by 52 there's your income

i use 45 weeks incase I have no tenants in the house for a few weeks.

now the fun part finding a house ,  google is very helpful, you can search the statistics for the areas you are looking at (what percentage rents,

works, widowed etc) 

find an area you think would be great for renting out remember it needs to be closish to work. Normally an hour or two away from the city is best bet

found that gem? But it won't be positive geared? Don't worry go look at it anyway take a note pad and night light, check the power points work, no leaks you can see

find the faults and lowball the real estate with an offer that will make the property worth your time. And don't be scared to walk away.

take into account settling fees, legal fees ect when you buy a house  ask your accountant for a list

talk to the agents in the area but before hand stop at the local shops and talk to them while you are going through checkout

, ask them about the local gossip and what not

questions questions and more questions is  the best thing you can do in an area you don't know

the only pro i could see with this is if you added an extra bathroom and turned the two door into an ensuite blocking the door not connecting it to the bedroom.

but thats a lot of work just for a rental.

Hi dreamingbig,

we currently did minor reno to an ex housing commission house in a housing commission area, we plan to do more but due to advice from our accountant all work is done after tenants have begun leasing the house (other wise it isn't tax deductible)

to begin with we put tenants in on the 1st and arranged with them for a painter to enter the day after,

we also spoke with the evaluator and asked about flooring, the floor doesnt really change the value of the house dramatically you will basically get what you paid for back if your lucky, the best thing with flooring to do is choose a low maintenance floor  like tiles they cost more but  you never have to polish them and as someone above said if water leaks they wont swell and damage as easy.. plus they look nice if you ever want to sell, wooden and carpet floors can get stains and scratches all over them causing future buyers to shy away a bit

as for the kitchen, we got the painter to repaint all the doors and clean up the handles, we plan to replace the kitchen soon but just dont want to blow over budget..

to be honest we

painted the house,

repaired the fan in the bathroom (its lid kept falling off)

cleaned the carpets (suprising they were in good condition but stunk)

painted the kitchen face

and installed a solar hot water system which was the most costly (coming to around $4,300 after rebates)

placed about $50 of pretty flowers in the yard…

total cost was approx 6K but the real estate said if the work was done before we signed on tenants we could have asked for an extra 30 a week and would have got it (not that we care the rent is already positive return), and the evaluator has increased its valuation by 25K

we still plan on putting in a new kitchen and bathroom not for extra value but more for the ease of renting it out and maintaining the condition

Hey N@than, its on the contract of sale, you agree that you will live in the house till the 7 years are up, but if the house goes on sale before the time frame is up than the new buyer must live in the house for a fresh 7 years. (some times they do it for 5 years and i have heard of them with 10 year obligations also)

housing commission have been doing it in areas they wish to mix the classes of people better for example about 2 years a go they sold up 30% of the houses around east nowra with this clases on the contract the houses sold for 50-90k renovated (fresh paint, new kitchens and bathrooms fully fenced yards)

we looked at a few houses back when they were for sale but the issue was not only the amount of time you had to live there and the fact that if you sold it you are obligated to restart that time frame for the new buyers, but the areas they normally do it in are really low return along with high abuse

some of the houses clearly had squatters in them and a few we even seen used needles and drugs laying around the yards

but the logic behind it is they will get home owners in rather than investors, as the home owners will "hopefully" raise the quality of the area and bring more jobs to the area

in all honesty in the areas we have seen these conditions of contract, i personally wouldn't take up the offers unless i was childless, 7 years obligation of living there with your family is not something i want.

we have a friend in the real estate Biz and when ever we see a place we might like we ask him to find out if they are willing to sell, but we have found if they dont have it on the market and you ask they normally try and be greedy and ask for more than its worth