Making the most amout of profit without paying too much CGT or extra stamp duty.

Jo,

I think you should only be considering getting rid of a property if it is not performing and is unlikely to perform. It wouldn't be a good idea to sell the negative geared one if you think there is capital growth around the corner (but this is trying to predict the future a bit).

I would not buy a negatively geared property, so that's my bias.
The strategy is commonly known as "buy and hope".

With the current economic climate, Aussie's not wanting to spend much (see recent retail plunges in sales), the general trend to saving more, I don't know that we have a huge prospect of capital gain per year.
I am not pessimistic about our property market, I believe jobs are strong and population growth will support housing prices.

Your investment strategy should reflect your market outlook.
Right or wrong, it gives you a  rationale of why your strategy should work in the current market.

Does anyone believe we will have an average of 7-10% capital growth over the next 7 years?
If so, that may be a good reason to buy negatively geared property.

If not, you pay weekly to have a chance of making a capital gain, when you don't believe we will have enough capital gain to make it worth your while! I know that property anecdotes suggest a property will generally double in price over 7-10 years. But with overseas economic uncertainties and local ones (not the carbon tax again!), I don't expect that will work currently.    

I prefer NOT to have my borrowing capacity tied up by property that makes me poorer, based on a long term hope.
For those who have a large wage, one negatively geared house may be a good inclusion in your strategy.

Jo is not currently on a high wage (been there at home with young children myself) and may have better uses for her (limited) investment dollars.  

Recently we have been in the midst of a small development, (moderately negatively geared in the development phase) which has drained our cashflow. And reminded us why we like cashflow properties! Although it should hold a worthwhile profit.
Of course, depends also on your risk tolerance, and what you consider to be a risky strategy.

Terry, I am well aware of the $16K threshold of taxable income, but again it brings the focus of one's investment back to tax-minimisation. Depends on the viewpoint of the investor, I'm sure there is room for a variety of opinions.