hey thanks for the replies duckster, ryan and on the money. lots to think about.

sounds like the better choice is a slightly cheaper place and get it payed off enough for the rent to cover the mortgage then get on to another house. this way ill end up ultimatly with bigger asset ( 2 cheap houses) than one expensive house (worth less than the other 2 combined).
i guess with this avenue the capital growth is less important than the rent? as getting the rent to cover the mortgage asap is most important. there fore a town house/unit style property would be suitable? any comments??? also how long would it take to pay off enough for rent to cover the repayments?