Mel I would strongly suggest you get some financial/tax advice before you go any further......... to have an investment property set up as such it needs to be set up in the original mortgage so that you can negatively gear it, claim the deductions etc........ the rent you recieve will be taxable, and if you can't claim the deductions (depending on your circumstances) you may end up being gravely out of pocket.

ETA, just another thought .......... not sure on this one, but if you rent it out you could end up being liable for CGT depending on the time frames as to when you can buy/sell etc. Get some advice!!!