Hi all We are looking to purchase a first IP with a budget of $400-450k. Like most first-time investors, we're looking for something close to home where we understand the market, neighbourhoods quality expectations etc. Only problem is - we live the inner north of Melbourne where median house prices are pushing $1M. Most people here seem to recommend investing for capital growth but anything we can get in this price range will be an apartment which will likely see mediocre CG. We may get breakeven cashflow but would not be expecting a 7% CG return. I also worry that most single family homes as investments seem to be highly negatively geared and take money out of your pocket every year. This doesn't really match with my internal expectation of an investment - it should be making me money, not costing me! What would you recommend in our situation? Should we expand our search to the fringes of the city or to regional areas (which we know little about) to find decent houses in our price range, or can an inner city apartment actually be a good investment?