You make some valid points, but, I'm not so sure about this ''zillion dollar'' one...
Could there be a certain combined (eg. husband + wife) gross income...above which pursuing a more 'growth-biased' IP buying strategy becomes more advantageous (after weighing up risks vs. benefits) than a more 'yield-biased' IP buying strategy?
Yes.
Regardless of the returns of the investment, a high-saving middle-income household able to generously subsidise their portfolio by (say) $20k pa simply cannot service more than one $400k IP returning 4% yield assuming 100% LVR, even assuming generous tax deductions.
Eventually they will be able to buy another (after interest rates fall, rents rise or they manage to save more) but this will be several years away at least and is a severe brake on expansion. Until that high negative cashflow is stemmed, the 'strategy' for your average investor is just to hold on to their one property because that's all they can service. In some ways the second property will be harder to service than the first because the buyer will have run out of deductions because their taxable income is now so low!
High earners who are careful with their money can afford the big shortfall. So they can go and buy 2 or 3 properties and build their portfolio quicker. There's a massive shortfall but the effort is a little easier due to their tax status. So instead of running out of tax on their 2nd property, they might still have a liveable taxable income on their 3rd of 4th. Still massive outgoings, but if you're happy to fork out (say) 5% of your portfolio's value each year and will bet that appreciation will exceed that. Provided the payments can be met, and assuming 10-13% growth, then it's a lucrative strategy for higher income earners.
However people on this forum are quite unrepresentative of the population generally. Many here think nothing of a $200k pa income, whereas in broader society such high income is rare (refer ABS stats). For 'ordinary people' then $200k pa income might as well be a zillion dollars and is about as attainable.
$200k earners undoubtedly exist (in their hundred thousands though not millions). As spruiker fodder they're sizeable, influential, profitable and worth talking about (and to). But ask them whether they're willing to spare (say) $50k pa to prop up a $1m 'high growth' portfolio and I reckon the hands still up would nearly all come down.
So we've got a minority of a minority. For these people a heavily growth-based approach may work. It may also work for some others (and has certainly worked in the past). But the keys are risk and serviceability, and too many otherwise respected commentators give too little weight to these.
