We have some capital (say $200k) which we wish to grow to purchase future property (might need $400k? more? ha, always need more!) but no income to service a loan as we own a business which supports our family with no surplus. Nearby is a house for $120k which currently rents for $235 pw, which we could buy outright, but it has limited potential for growth or resale (council zoning issue). Then, using income from this IP 1, we could get a mortgage for IP 2, with a better growth prospect in better location, say using remaining $80k for deposit and borrow approx. $140-180k, and use rental from 1+2 to service debt, pay it down in about 10 years, and then have greater equity to purchase further property or borrow against income of 2 rentals to buy said future property? What are the flaws in this plan, risks, problems? Could it be improved? I think there's enough buffer in there for interest rate rises? We're in the country so houses sell for low $$, rentals are fairly reliable but growth may be less than capital cities? Any other ideas? Thanks.