Cromagnon raises an excellent point which seems to elude the no-property people.
If you borrow the full amount (and outgoings) for your investment property and your tenants are sound (we have the DHA as tenants for up to 12 years) the actual out-of-pocket expense to the investor is minimal. When you also factor in negative gearing and depreciation the out-of-pocket is even less.
We find that after tax it will cost either nothing or up to $50 per week (to start with but diminishing year after year from then on). Admitedly there is a lot of time and effort involved in hunting for properties and arranging finance but that effort is concentrated in the beginning, after that it's smooth sailing.
Sushi mentioned earlier about prices going down. Well if you are selective and stick to properties with their own land footprint and you stay away from "prestige" (ie stick to median houses in median areas) then a drop in value is highly unlikely.
Infact it has never happened in Australia GENERALLY. I'm sure there are anecdotal examples of people buying at a silly price and selling for less later on but in the vast majority of cases people are more careful than that.
The drop in Australian median prices during the early 90s was only 10% and that was due (and this is a guess on my part) to the prestige and/or high rise unit sectors. I am pretty certain that the average 3br BV did not drop in value but rather stagnated during that time.
I am also certain that Melbourne and Sydney are due for a couple of years of stagnant prices but Brisbane will still see healthy growth in that time. Melbourne will shine in 2006-2008.
