Fingerscrossed,

I sold my PPOR a while ago and advertised through http://www.landlordschoice.com.au. It worked out quite well, although I think the market has cooled since then. I didn't bother with local papers, not even a sign.

Blackhotel, thanks for posting this link. It just shows that there are plenty of people who got screwed by RHG. I am one of them and had to sit out the 3 years of exorbitant exit fees they imposed on top of their discretionary interest rate increases which were almost exponential to what the RBA was doing. Anyone suggesting 'that it was all in the fineprint, you should have read the contract' has no idea what they are talking about. Nowhere in the contract did it say that RHG will raise it's interest rate whenever they like by how much they like, and it will not be linked to what the RBA does. I wrote to them, of course without success, and in the end did the only thing I could. I scraped together any cash I had in various other investments and paid my loan down to $10k. I even borrowed on lines of credit (which was cheaper). Now my three years is up, and I am refinancing.
The only thing that will stop RHG srewing their customers is a class action, and unfortunately us loan customers aren't organised enough to get together and act as group. The only good thing is they won't be screwing anyone else in the future, because they aren't taking on customers. Thank god for that.  

Wealth4life, I had a look at the site you recommended and there is pretty much nothing free on there? There are a number of interesting e-books, which you can't download unless you pay $500? Am I missing something?  

Hi ClintHarris,

I think you are doing the right thing by looking for a house to renovate. My experience is that units are easier to renovate (given the body corporate is cooperative), but as you said, the unit will always be judged by the exterior of the block. I've renovated one unit where the feedback from the agents was literally ' beautiful unit, shame about the condition of the common areas'. My first unit, which I renovated and lived in finally became a good investment when I managed to convince the other owners to renovate the entire block (rendering, painting, etc). The hassle I went through goes beyond anything I can describe here, and even though the property now looks amazing, and I sold it with a good profit, I would never do this again unless I owned the entire block. A house I renovated, on the other hand, even though it was more work due to landscaping, building a deck, etc, was a good experience, as in I had no hassle from neighbours and the DA went through in three weeks because it was complying.
What I'm trying to say here is that if you're after capital gain, go with a house, as there are too many restrictions on a unit to jump up in value quickly. 

Hi again,

I am not an expert on unit rents in Liverpool, as I monitor house rentals, and those have increased significantly due to a lack of supply. Just have a look at domain and realestate and monitor the number of properties in your category (2 bedroom unit, renovated or not). If you have 50 similar ones available (and they remain on the site for more than 2 or 3 weeks, then you probably can expect to rent yours at the lower end of the range. 
What I would do is drive out to Liverpool and attend a number of open inspections for rentals in your category. That way you can pick up a lot more details than just looking on-line and you can see how you can differentiate your unit through a reno so that you can achieve a rent above average.

I wish you success!   

I bought my second IP in Liverpool 3 years ago and am very happy with it. I bought a house (mortgagee in posession) at a discount and renovated it, making it positively geared straight away. Don't believe the scaremongers saying Liverpool is a bad area (I live in the Eastern suburbs, and was quite worried). I have never had any trouble with tenants, or property damage or any issues at all. The property has gone up 40% in value (partly due to the renos of course) and is now yielding 8%.

So my recommendation is to negotiate hard, look for something that needs a reno, so you can add value and then hold it. As a rule of thumb, I would usually spend about 10% of the purchase price on the reno, and when it's finished, get the property revalued, and it would have gone up 20% in value (basically a 10% gain ).