What would you do?

I am currently looking at buying my first property, my intention is to TREAT my first PPOR as an investment.

I am 29 and have saved ~80K + 7K FHBG. Our comined income is ~140k, and we have no kids. I am happy to continue saving at the moment, as i can pocket around 2k a month in net savings.

I am very cautious about the housing bubble, and the economy in general. We hear that property doubles every 10yrs. This isnt the case in the US or Euro. Regardless, i am a big believer in timing, and feel some great opportunities will present themselves IF the market crashes.

I know i cant hold off forever. My options are to either buy a house in the Hills district (~25km from city) for ~530k or a unit within 10km from sydney for ~450. I feel i can generate far more equity a lot quicker with the unit over the house. Athough, i hear the saying land appreciates and buildings depreciate as a factor i need to consider.

With Sydneys population growing i feel as an investment, being closer to the city would have more of an advantage. Do property investers have a general rule of thumb where they only use a certain % of the net income to put against a mortageg (say 25%). I've always been curious on what formulas of budgeting rules they comply with. I see so many people maxing out their borrowing power and becoming a debt mule their entire life. I see that if i buy something a lot cheaper than i can afford, the quicker i can build up my porfolio and generate higher compound growth, which is what im after.

I can generate 90-100k in equity within 2-3 yrs with the unit + capital growth which i see as stagnating, compared to ~40K with the house. This i feel is limiting my opportunity with the house?

I was also hoping that if i bought a unit and built up the equity, i could keep the unit as an investment and use the equity for a house that we desire to live in a few yrs down the track.  I saw a broker and he said that this cant be done? there is some law stopping investors to use their exsisting PPOR and turning into an investment property, apparently you cant claim all the tax benefits, which i found strange. I am not sure if i have explained this scenario correctly but if someone understands what im trying to say, some feeback would be great.

Whats the general consenus with property investors and our market? are most people optimistic with capital growth over the next 2-3 yrs. I dont believe there is much opportunity over the next couple of yrs. I feel like I would be buying at the peak of a cycle, which is what im worried about.

I have painted a picture of how im thinking. If you have taken the time to read my question and willing to share some feedback and opinions, i would be most grateful

Cheers,