Hi Saiman,
Well, sure, that's a fine option. But there's a bit more to it than that.
When I built my GF (for 120k), I just redrew from my mortgage offset account from the main house...effectively borrowing 100%. So the residence as a whole (original dwelling + GF) almost doubled in rent for me after withdrawing on only about 1/4 of the value of the property for the new build. The ROI/yield on the granny flat itself is 16% or thereabouts ($390/wk rent for 125k outlay), and the CoCR is infinite as the money was all borrowed anyway.
Don't get me wrong, I'm ALL in favor of buying multiple cashflow+ properties, 100%. Have done so in the past and will continue to do so in the future, absolutely. I'm saying that looking at it in terms of risk/exposure, cash required to outlay, and pure cashflow/yield terms, a granny flat/dual occ is VERY hard to go past the majority of the time when being compared to buying a completely new property.
Sidenote - Back in the day, I had a rough goal of owning 10 residential properties, now I feel like after buying 4 of them, I've "seen the light" somewhat and have adjusted that goal to 5 (futher) properties with dual occupancy development potential, that way I can achieve my goal of 10 properties but only have to fork out for land 5 times!
Anyway, look forward to hearing your thoughts Saiman (and others.)
R
