All Topics / The Treasure Chest / negatively geared with positive cashflow

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  • Profile photo of stargazerstargazer
    Join Date: 2002
    Post Count: 344

    hi everyone

    great forum and i think steve should be commended for starting up such an arena for input and honest expression without a fee attached.

    there seems to be many views on negative gearing/positive cashflow/wraps and i sometimes wonder which is the correct strategy.

    negative gearing is usaully targeted to more blue chip type property.

    positive cashflow is usually targeted to a lesser expectation of capital growth.

    wraps will give you cahflow but lose the freeehold and growth at the end of the term provided everything is ok.

    how about a negative geared property with a positve cashflow?



    Profile photo of Steve McKnightSteve McKnight
    Join Date: 2001
    Post Count: 1,763

    Hi Alf,

    Thanks for your feedback.

    You write:


    how about a negative geared property with a positve cashflow?

    With respect, isn’t this an oxymoron, like ‘finding an honest policitian’ or ‘male intellect (so my wife implies [:(])’?

    Really, the ‘negative’ in ‘negative gearing’ implies a loss or outflow. In most cases this is cash – or at a minimum depreciation savings to offset other taxible income.

    With respect to the depreciation, it is possibile to have some cashflow up to the point when all your tax liability is wiped out. But if you want to replace your salary with passive income, then -vely geared property is not a strategy I’d suggest trying.


    Steve McKnight

    Steve McKnight | Pty Ltd | CEO

    Success comes from doing things differently

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