Wow!!! You only owe $40k on your $200k property! Well done. You have been very diligent and payed that down and that puts you in a great position.

You have already received some great advice from the people above.

Interest only can be a great idea as your repayments are less and it frees up cash flow. However, if you prefer to pay down the principle then that isn't a bad thing. It just means it will be a little bit longer before the property becomes positively cash flowed.

You have put yourself and your family in a great position, almost owning your home outright and looking to invest. Keep looking into it. Even with only one income, it is likely that the banks will still lend to you if your finances are as good as you say they are. The might just lend you less than what you could currently get with two incomes.

What price range are you looking for your next investment property?

An interesting thing that I found out the other day.

Robert Kiyosaki (who Authored Rich Dad Poor Dad), who preaches positive cash flow property. Bought his home before he invested in any property.

Not saying that that is what you should do. But just interesting that the number one author on personal finance did just that.

I was always a fan of renting and then investing in property, but now I am swaying the other way.

Owning your own home has other benefits (even if not financal). It offers security for your family and over time mortgage repayments can be much less that rent. You can also tap into your equity to invest if your property goes up in value and your finances are solid.

Just note that though student properties may appear to have a high rental return they are often vacant for 2-3 months of the year when the students are on holidays.

This can put a strain on your cash flow.

Not saying don't do it, just saying that this is something to be aware of.

1. Demand – If other people are willing to pay more to live in that area that pushes the prices up. If more people want to live in the area then it pushes prices up

2. Supply – If there is too much supply (like loads of unit/houses) then renters can pick and choose and bargain. If there is a low supply and lots of people looking to rent then the renters can't bargain because they have less choice.

3. Quality of Residence – This includes how nice the place is, how light, does it have a new kitchen/bathroom, does it have inbuilt robes, does it have a good view or close to amenities?

Hope that helps you understand some of the big driving factors.

Duckster raises a good point. This is not something you should try and stinge on. Go and see a qualified professional and get professional advice. Forums are good to learn the ropes, but accountants know their stuff and the correct advice could save you a lot of money….legally.

Welcome to the forum.

Firstly, asking where is the best place in Australia to invest in real estate is like saying "Where is the best shop to find good clothes?"

It all depends.

There is no one best place to invest, and depending on your investment strategy some places might be good for you and bad for someone with a different strategy.

If you want high positive cash flow then rural centres can be a good place to go. Small towns usually offer higher rental yields, but then there can be the added risk of lower population = lower demands. If you want high capital growth, well that is a completely different story. Do you want to renovate, do you just want high growth areas, do you want to buy in Sydney or elsewhere?

There are so many different ways to invest and you need to work out what strategy is going to work for you.

If you are looking for cheap towns close to sydney so you don't have to spend a lot of money you could look into places like Goulburn, Dubbo etc. Get out your Google Maps on your computer/iphone and look for the big rural hubs. Then get on realestate.com.au and start searching.

Hey and welcome to the forum,

Looks like you already have your foot in the door when it comes to the property market, which is the hardest step. Have you got your IP positively cash flowed yet? 50% equity is pretty impressive, well done.

I agree with Richard, if you have a part variable home loan why not switch that part to IO immediately and save the excess money for your next IP/PPOR.

It's hard to go wrong if you buy in good neighbourhoods and stay on top of things. Make sure you have a good real estate agent and that you aren't renting the property for below the market value.

As everyone has said, properties will probably always go up. So if you can afford it then it is a good strategy.

I prefer to go positive cash flow as I am making money from day one. If you go negative cash flow then you will want your capital gains to be significant as they need to outweigh the money you are pouring into the property in expenses every month.

But yeh, if you can afford it then it sounds like a pretty solid idea.

One caution, if you leverage yourself too far (eg having 95% LVR's) then if interest rates go up a lot it may make your cash flow very tight.

It still could be a good idea. You be the judge, not us. You know your situation and the property better than us. If it is right for you then there is no point letting us hold you back.

I'm with you. Not a fan of units because strata strips any cash flow you might get. Houses are better because you can control the finances better (I think).

Before choosing a strategy you need to clearly identify your goals. There are hundreds of different strategies for investing in property and they are all good. But not all of them will be right for you.

You already know you want to pay off you PPOR….good! But how do you want to pay it off? Do you want rental income (aka. Positive cash flow) from investment properties to pay it off? Do you want to pay it off yourself while buying investment properties also? Do you want to get capital growth with your investment properties and draw down equity to pay off your PPOR (kind of like moving the debt to your investments).

When do you want to pay it off by?

Then….long term

What do you want to achieve from your property investments? How much cash flow per month do you want? How many properties do you want to own? Do you want high capital growth or high rental yields?

Do you want to buy and renovate.

By looking at what you want to achieve you can cancel out 90% of the strategies that are out there, as most of them won't suit you.