Best method to have 4 ips paid outright ?

If you decided to do this and the interest rates were very different you'd pay the highest rate loan off first. In that case I think you may be able to see a difference.

 

Yes. I assumed all properties on the same rate.

 

Dual Occ is by its very definition two dwellings on a single title. One set of rates. Two incomes.
A duplex on separate titles isnt dual occ. Its two individual properties, with each generating an individual income. Duplex type designs can under the right circumstances, be dual occ, though

The preferred dual occ design is two detached dwellings rather than two under one roof, in my view, at least. This way, even if you resell to an Owner Occupier, they have a 2nd dwelling that can be utilised to generate income. With attached dwellings, yes they have the same option, but they lose privacy. It's a small distinction, and in many cases you cant really choose because of council, but wherever possible, detached is the preferred option.

 

Or better still fill the offsets and pay "off"(set ) the debt. This way you become the bank

 

Yep...but borrowing capacity doesnt improve ... at some stage you have to let go of the money in offset and make principal reductions to the debt instead

 

Correct but you can do it if and when required.

 

We agree

 

Agree. Keep it in the offset as long as you can.

 

Keen to learn some modeling from you ..ok to PM you ?

 

With modelling choosing a rate must be important
1 do you assume cities/suburbs continue to follow past trends
2 after long boom period or long droughts do you assume different growth rates
3 do you assume different rates for land only properties

 

If i can model the future i would be more focused on a fixed direction
When i compare my higgley piggly portfolio to say the Lowry (malls) or Tramco (lessors interest) Friedlanders (auckland ponsonby) clear focus i can see how a focused portfolio excels over someone who chops and changes
Over time the difference in portfolio profit is major

 

I can't model the future either. But I can compare paying down 4 properties concurrently vs sequentially.

 

None of those. If I need to estimate future value I use CPI. I am not trying to predict the future, I am comparing the impact of 2 options. The future value won't be accurate but the differences between the two options will be clear.

 

Sure but I think the modelling I do is very basic compared to what you are talking about

 

This depends on the plot of the land. If regional where you can get a plot of land that is 800m2 with good frontage for cheap, then yes.
However in metro city, land comes at a price, and you can't go detached dual occ for less favorable frontage and lot. As you said getting that 6% + depreciation on dual occ is probably the best approach when nras winds up.
There are plenty of these type of deals in se qld that is 20-50km from city.

 

Capital growth IS what makes you your money .Cash flow helps you hold properties while their value goes up .

On two occasions in the last fifteen years we've had enough capital growth in a period of around 2-3 years to pay down enough property to fund what most people consider a reasonable retirement .

Cliff

 

Create chunks of equity by value adding then pay down the loans with hundreds of thousands each time you manufacture equity. No faster way imo.

 

Yes, that might be the strategy for OP.

His ultimate goal is to hold 4 paid off properties. And according to your post he will have to hold several more properties for several years to wait for enough CG then pay off 4 and sell the rest. I think the chances of going wrong with that strategy are just too many and he needs to come up with deposit for those properties as well.

 

Not really its probably one of the least risky strategies and if bought well and then goes through a boom you have your equity. Also he won't have to save for the deposits for each property if he can extract equity from the properties as he invests which then form the deposits. It's pretty much what most (though I'm not a hardcore fan of only employing this 1 strategy) property investors do.

 

Here is the thing I don't like. The most investors you are talking about did that in Sydney before the this boom when yield made sense. Now that strategy cannot be applied in Sydney because yields are crap. And places where it can be implemented is not going to have that kind of boom.

In Brisbane and Adelaide you need to have 20 properties (for instance) for 10-15 years for them to go up 100K each to have $2m in equity. Remember OP is looking to buy <= 350K properties.