Can all investors succeed through negative gearing?

Can all investors succeed through negative gearing?

Ben Kingsley, Director, Empower Wealth

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Negative gearing is an important part of how you invest in property for those people who may be on good incomes. How it works is simple; you basically have out goings, which is the interest and the holding costs of the property, are exceeding the income, the rent that you're receiving. So for investors who are looking to use negative gearing, it's a great way to get into the market, minimize the tax that you're currently paying through your PAYG or through your business. Over time that asset's going to grow in value and as that asset grows, so does the rental income. So that negatively geared property in the early stages, with the capital value appreciating, also with the increases in the rent, will turn positively geared and give you a wonderful passive income for life.

Listen to other instalments of The Smart Property Investment Show:
Episode 78: Savings tactic: how house-sitting helps this couple save money for property
Episode 77: How will the government's changes to tax depreciation impact investors?
Episode 76: SPI portfolio update: what's next for the team?
Episode 75: How travelling cross-country helped this investor buy 9 properties in 6 years
Episode 74: How this investor plans to double his portfolio within 10 years
Episode 73: Bad builders: how this investor bounced back
Episode 72: Policy changes to interest-only loans: what buyers need to know
Episode 71: How this 'stubborn' investor recognised a property lemon
Episode 70: How this investor complements each property and balances his portfolio
Episode 69: Are you a ‘lazy’ investor? Consider the benefits to working with a financial team
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