Advice pls: Buying house and using our apartment as an investment prop

Hi,

My partner and I currently live in a 2×1 apartment in Maylands, Perth which I bought in 2005 for $150k, currently there is $120k remaining on the loan (which is fixed at 6.59% until end of 2008).

We have got sick of apartment life and are now in the process of purchasing together a 4×2 house in Wattle Grove to live in for $410k (expected loan amount 390k) with the intention of renting out the Maylands apartment.

I'm currently paying around $220 per week for the apartment loan, and expect rent return to be around $250 per week.

A few questions…

– Do I need to change the apartment loan to an 'Investment Loan' or can I keep it like it is?
– Should I change the apartment loan to 'interest only'? I realise ppl do this since you only get tax benefits for the interest paid on an investment, but isn't it better to get the loan paid off quicker?
– Should I put the apartment in both our names? My partner earns less than me, are there any tax benefits?
– The apartment has a bit of 'maintenance' needed (eg cracks in bathroom plaster) is it worth fixing these things, or better to leave it 'as is' (with possibly slightly lower rental return)

– Are we doing the right thing? It seems like we are since the value has risen greatly since I bought the apartment, so the high rents will almost pay for the loan + other costs, and I predict rents to rise even more, but with high interest rates we'll be paying a lot to service the new house loan.