The Difference Between Positive and Negative Gearing

“Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.”~ David Copperfield

Whoever thought that two hundred years ago Charles Dickens would be describing the difference between positive and negative gearing!

Over my years of investing it has really surprised me to discover how many people do not know the difference between positive and negative gearing.

It really is as simple as Charles Dickens explained of making sure that the entire income from any Rental property is more than the expenses.

When weighing up the expenses you must include everything: the sale price, stamp duty, solicitor’s fees, land tax, council rates, water rates, renovations & repairs and, if it’s a unit, strata fees. Strata fees can be a killer. Many people have got out of holding a unit just because the strata fees were too expensive.

Did you know that only 10% of people in Australia have an Investment Property and of that 10% only 5% have more than two?

If you would like to have a positive Cash-flow investment portfolio to give you a secure retirement then I suggest that, as this is close to the beginning of the year, you should plan to buy at least one investment property this year.

In my coaching program I help people build up their portfolio over their working life so that they have several properties bringing in a positive cash-flow, passive income to secure their retirement.
How many properties do you think you could buy if your properties were negative geared? Because you’re paying for them, out of your salary, you will probably only be able to afford two. However if you have positive geared properties and you can show the bank that the loans can be serviced you should be able to afford an indefinite number!

Nowadays, with interest rates below 5%, it’s a lot easier to find positive geared properties, where the rent will cover the mortgage repayments. However, what if interest rates increase? How would you cope when they do go back to 7, 8 or 9 percent if your property is already negative geared?

So if you plan to retire before you are 70 on more than the aged pension, I strongly recommend investing in property with some expert advice.

Anita Fursland
Positive Properties
02 9545 5005
0405 100 146
www.positiveproperties.com.au
anita@positiveproperties.biz

“Be fearful when others are greedy…..”

A few days ago a student of mine asked me “Is this the right time to buy?”

A great question!

House prices have been rising at a rapid rate over the last 12-18 months and the seasoned investors are taking their profits from purchases they made 2 or 3 years ago in readiness for the next dip. In my family alone we have sold 3 properties in the last 3 months.

So are you about to buy at the peak of the market?

Are you confused about what to buy and where to look when it comes to buying an investment property?

Book in now for your Discovery Strategy Session to discuss your needs, goals and where you are now!

This situation reminds me of an old army story my dad used to tell. After a particularly hard day he dropped by the officers’ mess and asked the barman, “I suppose it’s too early for a Gin and Tonic?” The barman replied, “Well the sun is behind the Yardarm somewhere in the world, sir!”

That doesn’t mean you have to go to Queensland or the USA to find ‘hot’ deals but it may mean you need some guidance to find them locally.

Checking back recently on a would be potential client, who had decided not to go with my coaching, he told me he had “gone it alone” and bought half a duplex for $520,000 and the rent was $400/week. My heart bled for him because, although he seemed to be totally happy with this negatively geared investment, I wondered if he had worked out how long he would be losing money on this deal and how he will cope when the fixed interest period stops and interest rates go up.

The funny thing is that when this scenario comes up on a card in Robert Kiyosaki’s “Cashflow” game most players won’t touch it with a barge pole, but in real life people make this mistake all the time!

• It is a well-known fact that if you increase your education you lessen your risk.
• Do you know how to find properties brining you in at least $200 per month?
• Let me save you from losing a fortune on a weekly basis.
• Learn how to find positive geared properties even in this current market.

Book in now for your Discovery Strategy Session to discuss your needs, goals and where you are now!

Call 0405100146.  

In this 1 hr session you will:  

• receive clarity on your goals and current situation 
• learn how to create a deposit of $30,000
• discover how you can invest in  Positive Cash-flow property and look forward to a brighter, more secure future and retire doing the things you love!

These sessions are limited as I only have a few spaces left in my coaching program for this year. So get in touch with me NOW on 0405 100 146 to book your appointment, or click “make an appointment” to leave your details so we can call you back.

If you feel like you’re swimming upstream, take a boat!

Let me help you, call Anita Now 0405 100146!