Wealth Build Australia, Asset financial services, DJM Accounting

What I was getting at is that CF+ properties (cash cows) can aid with debt reduction, because they add net after tax income to your household. Debt reduction is really valuable in a lending environment where borrowing capacity is limited - especially because all existing debt is assessed at 7% P&I or higher . Often 7.2% - 7.5% P&I by many lenders . So removing debt - especially non income producing, non deductible debt such as PPOR debt, credit cards, HELP debt, car loans etc - can have a very significant impact on future borrowing capacity. But even where PPOR debt or other non income producing, non deductible debt is not a factor, CF+ properties serve other very useful purposes. They will enable you migrate investment loans to P&I and pay down debt faster, thereby establishing equity even in periods of low growth. They can also serve as a hedge against future rate increases.

In the end .. extra net income is extra net income. I don't know about you, but I don't think having extra net after tax income is ever a bad thing , right?

Yes, a 200K cash cow would work, provided it generates the surpluses you want/need ie 6,7,8K CF+ or better. Really, any property where strong net surpluses can be achieved- whether resi cash cows such as NRAS or dual occ, or commercial , or adding a granny flat to something you already own, can be helpful. Even US properties (if you can get the numbers right....) As long as you use the surpluses as intended- ie for debt reduction.

Just make sure you buy to a borrowing budget that is affordable to your circumstances, and reinvest whatever surpluses you generate towards debt reduction. This way you know that whatever happens - low growth, no growth, P&I re-sets etc- you have insulation that those with vanilla yields dont have .

Buying 1 or 2 INV properties is generally the easy part. Harvesting equity to buy more and more properties, then holding those properties when lending changes or rates change or P&I re-sets happen, is the real challenge now. Cash flow and debt reduction help with that.