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Negative Gearing


Negative Gearing - What is it?

The term 'Negative Gearing' is bandied around but many people don't actually understand what it means. Negative gearing is defined as "when your income from the investment is less than the cost of the investment (e.g. interest that you are paying to your lending institution on the loan). The difference between the two amounts is usually a deduction on your taxable income." (from the Australian Securities and Investments Commissions website).

Negative gearing is an incentive for investors if it is utilised sensibly. It is not designed purely for the purposes of an investor making a tax saving. How profitable a negatively geared investment is largely depends on the ability of the investor to repay the mortgage and it also depends on after-tax capital gain.

If an investor is to make money from a negatively geared property, any potential future capital appreciation must be higher than the certain cashflow loss incurred today.

Why get involved with Real Estate as an Investment?

When you compare the returns of real estate to other types of investment, it has a relatively high ratio between security and income yield. While the sliding scale of risk and return still applies to a property investment, it does so at far less extreme ends of the scale. Basically, real estate investment can provide you with both security and a reasonable return.

Realistic Property - Why use us?

Realistic Property are a professional investment property and real estate service. We pride ourselves on finding you the right property, in the right amount of time, at the right price. We are professionals in our field and know you will be pleased with the personal service we provide to each and every client.

We specialise in Queensland real estate, particularly those properties located in the South East areas of Queensland, including Brisbane and the Gold Coast. 

More Information on Negatively Geared Investment Property

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