Greetings all,
The general feeling I get from reading these forums is that negative gearing is the great evil in property investing. I haven’t read Steve’s book but have listened to fast track and he seems to have built his portfolio through positive geared property.However for someone like myself who is in a high tax bracket I find it extremely advantageous to have a negatively geared property to get some deduction.
Obviously if I was to live off my investments I would want them to be positively geared. Even with my income it would be nice to have some positively geared property – a mixed portfolio if you will. My belief has always been if you are paying more tax you are earning more money and that is never a bad thing. I also believe paying tax is an important responsibility in our society.
Obviously I am largely ignoring various company/trust structures that can be created to gain further tax benefits.
I guess my question is why this forum seems to generally view negative gearing as the great evil?
Cheers,
[email protected]The cashflow people tend to dislike negative gearing as they say you are making a loss in the hope of making a capital gain later. There is no guarrantee the gain will come (just as there is no guarrantee the sun will come up tomorrow morning
)Ideally it would be great to have positive gearing and high growth, but unfortunately it doesn’t always happen like that. So high growth property is usually negative geared.
Terryw
Discover Home Loans
Parramatta
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Hi Mcdeyess,
Anti NG’ers will use the ‘hope’ of CG as being one of the reasons why NG is not a surefire way to successful investment for the reasons Terry mentions.
I tend to disagree as such risks can be mitigated by good research and careful management.
I would also add that NG (per se) needn’t confine you to your 9 – 5 job for the rest of your life. By way of example my wife and I have equity of $1m+ and have set up structures and process along the lines of my comment in this thread https://www.propertyinvesting.com/forum/topic/24725.html which provides us with options.
Derek
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Skype – derekjones2113Thanks for the feedback guys.
It has made things a little clearer in my head with regards to the attidude to NG in this forum.
For my own purposes I have been happy making some CG, developing some equity and having taxation advantages. I really only bought a house initially as the prices just seemed to keep rising and I was worried if I didn’t jump in I would never be able to afford a house. I am glad I did as it gives me more options now as a more informed investor.
I read your post Derek and found it interesting and informative. There are some options there that I was already looking at and some new concepts to investigate. Much apprecieated.
Cheers,
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