Excellent! Steve’s article on negative gearing is a marvelous read, put in plain English and easy to read and understand.
Coming from a UK property investment background where negative gearing was a big NO NO I was gobsmacked to see how it it used to sell properties here in Australia. I would never dream of taking on property with negative gearing. It’s a very scary prospect. I once had a property that went into negative cash flow during the recent (some say still current) UK recession and it scared the life out of me. It caused all sorts of stress and worry. You need to be very careful.
I have ridden out the Uk recession which was very bad for at least 6 years and it taught me a lot of lessons. Six years in the business with little or no increase or a decrease in equity and sometimes a loss and falling rental yields as accidental landlords caused an over supply. Mortgage lenders started exercising their right to consolidate loans across a portfolio (never done before) making selling very difficult as there was no point. Mortgage lenders kept the equity from your house sale to reduce their overall loans. Many people lost everything as lenders jumped in and repossessed after only 2 missed mortgage payments.
Steve’s article is a must read for any potential property investor anywhere in the world. Thanks Steve.
WinWin.
