Hi Dylan, no I haven't heard of this offer however there's no free lunch and the cost would definitely be passed on to the purchaser somewhere along the line.
How do they pay? It may have awkward tax implications as well.

Hi Walexx. welcome to the forum. It sounds like you have done a bit of research on Newcastle though I'm unaware of any passenger terminal being built in the near term. Newcastle  has a well established university offering Medicine / Law / engineering / nursing / science etc. 2 solid building society's an air force base  just out of town…do I need to go on? Rental vacancies are at a critical level. 
Coming home from work the other day I came across loads of people and cars everywhere.  I slowed my trusty stead down (on my pushy) to have a look at what I thought was a car crash or the second coming. No, it was an open house for a rental property. Really sad as ther was a cross section of people there, not just students….great for us though, a poor overall position for any community to be in. Go to Domain .com and do a search on a particular suburb.
I don't think you need to worry about growth.
Good luck, PM me off line if you wan to discuss particular suburbs.

Hi Blissy, welcome to the forum.  Congratulations on your engagement! Sounds like your  first IP is working our well. Good choice, hard to beat a  family house in a solid area with long term tenants  Have you had a Depreciation Schedule done yet? (worthwhile regardless of the the age of the property, cost about $400 ish)
You didn't mention  other debt / children / credit cards etc. If they weren't an issue then it would be worth while talking to a Mortgage Broker to discuss your next move. My MB lives in your area if you need one. PM off line for details. Good luck.

Bummer, sounds like a nice place and I bet you have fallen for it!
Yeah, I'd do a runner.  Its a lot to spend on your first house and have the thought termite damage in the back of your mind all the time. Termites are a fact of life for most of Oz but there are plenty of homes not affected.
Plus the drainage issues…whats next? Does it smell mouldy? I bet its been recently painted
Too many questions for 400 plus big ones.
Good luck and keep looking.

Hi Fredo,  I think you have answered your query yourself in the fact that you are refinancing a complex loan. I'm also refinancing at present and have used a MB for years and will continue to do so.
Things have clearly changed and the time frames have extended significantly so dont be too hard on your MB.
The level of scrutiny this time around is much more than anything I have experienced before. We have a stable employment history, multiple properties, low LVR, no other debt, wear cardigans, watch ABC. Tick all the boxes!
Its always difficult if your in a hurry. It will happen…

I certainly would. I've been burnt before and now I take a date stamped  photo of every surface I can point the digital at. The tenants dont particularly require a copy as they will probably know you are doing it anyway.

Oh, my mistake. I misinterpreted ''The panelling has been laid in section 1 metre wide and it set on the diagonal" as being 1 metre high panelling as per Dado boards.
Kind of changes things a little.
A few choices: 1.  leave it alone and hope for the best. 2. Contrary to what I said, break out the paint brushes. Matt white / cream all round. 3. Gyprock over one wall as a feature or the whole room, one at a time. You could probably just remove the skirtings / architraves and let the gyprockers go for it. 4 Paint one wall only.
I've seen some shockers but that must be up there in the bad taste department.
It's all good though, not structural, just a pain and its certainly not urgent. From what you have disclosed people will rent it regardless.
Would love to see some pics?
Good luck, let us all know how you get on.

Though its close to Parramatta and the station it is really a tiny unit. The average stay wouldn't be long hence eating into your profit margin (if any) with the REA taking a weeks rent every new lease. Also the equivalent of  2 months rent go to rates/body corporate etc. The shared laundry may turn many people off when the rental market isnt so tight. Keep looking, plenty about……..

That would be a no.
Its called fraud.
Banks would  laugh at the suggestion.

Hi Fiona, rent free for a year or two!!! Good for you and what a great opportunity to get the ball rolling.
Firstly :  
"Given the no rental expenses, and our relatively high incomes, i think we should be able to cover this cost. We also aim to keep an emergency fund of $10k for anything that pops up unexpected (do most people do this?).

Yes as I stated before that amount would be achievable on your current income.
A few questions. ( you don't have to reply     Do you have any other significant debt? Credit card, personal or car loans?
Who pays the rates / maintenance / utilities on your folks home while they are away? (lucky buggers, good for them).
Emergency fund. Yes, many people have it in the form of cash or a line of credit. Absolutely essential and its good insurance for hot water services, leaking roofs or anything. This amount should increase in proportion to the amount of properties that one has.

"Hence, i guess there is a 'comfort' factor for buying the IP there – we know the tight rental market, and feel confident we can rent out our first property well, and any subsequent IP's.''

Probably a common reason to invest in a particular suburb that you are comfortable with. Nothing wrong with that, just very limiting. Particularly if the properties are 500k plus.

"In addition, we have found looking at property under $500k (and even higher than this) we are up against huge competition – first home buyers. We have seen many houses in this sub $500k bracket go for much higher prices, as first home buyers are 'desperate' to purchase, and many are purchasing with emotion. We are keen to avoid this bracket (although at the $600k price point, we will still not completely avoided this)."
I'm aware of what your saying but its still not a sound reason to base your investment decision on. there are bargains everyday, everywhere. As your aware the FHOG will be wound back later this year so this will not be an issue.  

"May i ask why you suggest using a different lender for each property?
Its called Cross Collaterization and its a trap for young players. Richard, help me out here please? 
Go to Qld007 web site and look up Richards reason against CC. Very convincing arguments. Were attempting to unravel our CC finances at the moment.  A night mare as the bank 'owns us" and we can no longer get finance with them. Actually not enough for our needs. Any bank, regardless of your partner being an employee will limit their exposure to you eventually.

 Also, is the best set up to have an interest only loan, with an off-set facility so as to build up 'accessible' equity to use for the next purchase?"
There are several schools of thought for IO and P&I loans.  We have a mix of both, suits us for our particular circumstances. IO loans free up a bit of cash to service other loans, however that has to be considered against the principle not decreasing and gaining less equity.
We have an offset account, works for us.

So, a few thoughts. You guys are young and you may want to travel. The bills still have to be payed.
Babies can happen anytime since finding the cause…..
Fiona, I would highly recommend that you continue to read widely in relation to Real Estate. Any Aussie author is worth reading.
Do your subscribe to Australian Property Investor? A great read. I'm currently reading a book by the Reno Kings. Stories unlikely to be replicated anytime soon though.
Finally talk to at least one or two Mortgage Brokers, preferably one with an IP.
As I said before, locking your self into so much debt so soon may not be the best option. It could reduce your borrowing capacity if capital growth is stalled.
Just my thoughts. I'm no expert, so  ask lots of questions.
Good luck.