The Difference between Positive and Negative Gearing!

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.

Discover the 7 questions you need to ask yourself before buying an investment property go to the  opt-in box at the right of page NOW for your Free Tips!

 

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

Attention Novice Property Investors!

“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.

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

Let me help you, call Anita Now 0405 100146!

Speaking of Property – Successful Subdivisions

             Come along and network!
Learn about the Art of Property Investing!


Anita Fursland of
Positive Properties
invites you to

Speaking of Property

with

Michael Angelovic

    “Successful Sub-divisions”

Hints and Tips Galore!

7.00pm – 9pm  Tuesday 16th September 2014
Bankstown Sports Club
8 Greenfield Pde,
Bankstown
RSVPentrance  $10  at the door
Hume Room, Level 2
contact
        anita@positiveproperties.biz
https://www.positiveproperties.biz

RSVP
anita@positiveproperties.biz  0405100146  

         Michael  Angelovic

 

           

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3 Common Mistakes!

3 Common Mistakes that inexperienced investors make!

Are you curious about the three most common mistakes that investors make?

Through my seven years of investing experience this is what I’ve discovered:-

  1. Most inexperienced investors buy on emotion.
  2.  They don’t crunch the numbers.
  3.  They don’t buy in the right areas at the right time.

FREE  TIPS  put your details in the opt-in box at the right of this page!

Did you know that:

  • Most first -time Investors are so caught up in buying a property just for the sake of owning an investment they don’t assess the situation properly or do their due diligence.
  • Many do not crunch the numbers and take into account all the relevant expenses, including renovations and repairs, to see if they can actually afford the repayments on the mortgage. They also need to consider future mortgage rate rises.  They see a property for $350,000 receiving $350/week rent and think that it’s a good deal.
  • Also they don’t know how to research the buying cycles of various areas. Which means a lot of people see a huge demand for an area  and do not realise they are buying at the top of the market, only to be disappointed  a few years later with a lack of capital growth.

If you would like to know the 7 questions you need to ask yourself before buying an investment property go to the  opt-in box at the right of page NOW for your Free Tips!

Going into 2012

Going into 2012, are you worried where the global situation is heading?
Don’t worry whether your “Super” is going to be enough to secure your retirement!
Take advantage of the current market conditions
  • low interest rates,
  • motivated vendors,
  • discounted properties

There are thousands of property deals throughout the Australian market, right now, that could give you

  • instant equity to balance your portfolio
  • surplus cash-flow to put extra cash in your pocket
For most investors the hard bit is: 
  1. finding these properties without wasting countless hours on the process
  2. determining whether the deal is feasible
I want to show you how you can solve these all too common problems and change the way you invest in property.   
Let me send you the SEVEN Questions you should be asking yourself to set you on the path to successful Investing in passive income properties allowing you to retire in comfort, with a secure future.

Why Negative Gearing is a Losing Strategy

Why Negative Gearing Is A Losing Strategy

I find it absolutely bizarre that people invest in real estate in order to receive tax
deductions rather than looking for a return on their investment. In other words, they lose money on their investments so they can claim the losses against their taxes.

They call it negative gearing.

A negatively geared investment is a business which you’ve deliberately structured to run at an operating loss. You do this by borrowing so much that your interest payments exceed the rent you receive from the property.
Why would you do such a thing you may ask?
People do it because the loss is tax deductible and since most people hate paying taxes, they would rather lose money on their investments, than pay the taxes. If you are in the highest tax bracket in Australia, you will receive a tax refund of 48.5 cents for every dollar of your negatively geared loss.
What this means for you however, is that you still need to cover 51.5 per cent or more of your loss from your after tax earnings. In other words, for every dollar you spend on a negatively geared investment, the tax man will only give you 48.5 cents back.

So, for as long as the negatively geared investor keeps their property, they have to keep shelling out more and more of their hard earned income to keep their investments afloat. (No wonder so many negatively geared investors get sick of losing money and sell out after only two years).

Now I don’t know about you, but I’m not particularly fond of losing money. I’m
interested in making a profit from my investments, not a loss.
Negatively geared investors go in for such deals in the hope of selling their property for a huge capital gain in a few short years. While it works for some, most such investors soon tire of the constant cash outflow and cut their losses by selling out.
Those that seek to grow their property portfolio in this way, eventually reach a point where they can no longer obtain finance to buy another property. With each property they buy, they need to put in more of their personal exertion income.
Even though the properties may be appreciating well, the negatively geared property portfolio still requires ongoing external cash resources to pay the bills and more particularly, to service borrowings and other outgoings associated with holding properties such as rates, repairs,management fees, insurance and strata fees.
I’ve heard more than one negatively geared property investor lament: “I invested in
property so that I could eventually leave my job but now I find that the more properties I own, the more I need my job to keep paying for the investment properties.”

A much smarter way of investing is to find properties that will put money in your pocket.

This is called positive cash flow real estate investing.

Hans Jakobi’s www.RealEstateInfo.com.au

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For anyone who wants to get started in Real Estate Investment or add to their portfolio.

Do you get confused – not knowing what to look for?

See how Anita is replacing her income and “transitioning to retirement” in just a few short years.

Come along and have some fun whilst learning to be a smart investor!

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Email:  anita@positiveproperties.biz

Looking forward to seeing you soon

Anita Fursland   The Real Estate Realist