All Topics / Help Needed! / Postive Gearing?

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  • Profile photo of cashdownecashdowne
    Participant
    @cashdowne
    Join Date: 2004
    Post Count: 6
    October 18, 2004 - 4:12 am

    Hi All,
    This may sound like a silly question about positive gearing which,as an option to capital appreciation and negatove gearing, can provide access to passive income in the long run? It is hard to know though which way to go to seek that elusive financial independence.

    How have others decided which way to go?

    But, when actually acquring a property how does one postively gear without putting in one’s own deposit?(ie using existing equity to raise finance) Is it only by locating high return properties and or puchasing below market value?

    Look forward to any views.

    Thanks everyone.
    Chris A

    Profile photo of landburn15972landburn15972
    Member
    @landburn15972
    Join Date: 2003
    Post Count: 9
    October 18, 2004 - 5:06 am

    G’day Chris,

    positive gearing can come in all shapes and sizes. A good renovation that results in cash flow can be positive gearing. However if I can give you a personal example as too how I have positively geared in the past without cash down.

    I bought a 2 bedroom unit in March 2003 in Brisbane. Purchase costs were $66,500. The unit was rented for $150.00 per week and I received $20.00 in free money. Not a huge amount but this is a real life example. So buying in the right location can have something too do with it however its all about the deal. If we both bought in Rockhampton 2 years ago we could get 4 packs of 2 bedders for $180,000 rented at $640 per week. On the figures $6500 after all expenses in free money.

    Im looking in NZ at the moment for these types of deals.If looking in oz you have too be patient.

    Hope this can help

    all the best in your search

    [biggrin]
    Gerry

    Profile photo of RodCRodC
    Member
    @rodc
    Join Date: 2002
    Post Count: 335
    October 18, 2004 - 11:07 pm

    I agree with Gerry,

    There are certainly possibilities in NZ, but they do have throw up a whole other set of risks. Not a problem as long as you are aware of them and take them into consideration.

    Aus is certainly tougher at the moment, there are positive cashflow properties around but in many cases the overall quality of the asset may be questionable. The key is to be patient, do the research and when a good opportunity comes up be in a position to make a decision.

    regards,

    Rod.

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