Financinc for fun and profit.

I have 2 friends.....

one owns a house outright but wants to move to a better area. Can sell house and buy unit in the new area. Would you do this and then borrow against the new property for investment properties or would you keep the existing house, borrow against it in the form of a cashbond to finance rent on a property where you want to live and also buy investment property to provide some deductions. Will have rental income from two properties but deduction/depreciation (tax effective) on only one.

friend two has just bought a substantial house for $660k with 50% deposit. I told him he should borrow against his equity and buy another one or two properties. He wants to pay off the home loan as quickly as possible. I said get an offset account - will have same effect and preserve cash as the property is old and there may be maintenance problems down the tract. (PS will be renting this out for a couple of years before living in it).

Ideas please?

1. Info provided is a little skinny on detail, but generally would prefer to keep existing PPOR, perhaps pay stamp duty to place into trust and regear in the process.

2. Borrow to 80 % of IP to be PPOR, as you say use offset acct to park the extra 30 and then do whatever.