Hi PI”s
I still dont understand why anyone would invest in negatively geared property especially if they were on such a high income or low income for that matter. At least find something neutrally geared.I understand tax implictions but id rather be paying the tax man then the banks at least i have some idea where my or my tennents money is disapearing.( not a debate just your thought)
Aloha Dom
[
]Here’s a tip: generally, high yield dictates lower
capital growth. It’s all about personal strategy.
Many negatively geared properties are that way because
to some extent future CG is priced into the purchase.Personally, I think that +CF is better when starting
but after a while $50 a week doesn’t affect your bottom
line much and that’s the time to switch to the big CG
fish.andy
What do investors think about this stategy?
Dom[]Hi,
There are a lot of people that i know that use a similar approach on balancing between CF+ and CF- (whether it is to the extent of SIS) but they use CF- and make sure they are in high growth areas so that they can use those proceeds to help with new properties – the main issue is finding the proeprties that will take off – using the increased rent from the CF+ to pay off the previous loan
it’s one of doing it
cheers,
bluecatDo today what you want to do tomorrow
I believe it is better to diversify your investment strategy. Although having all +ve cashflow properties makes for higher income in the short term, there are of course inherant risks associated with them. Whereas with neutrally or -ve geared properties are usually in areas of good cap. growth and good tenancy.
The idea I feel would be to have a spread of all these types of properties in your portfolio. In other words a mix of high risk and low risk properties.
We currently have only two IP’s, one neutrally geared(Brisbane CBD) and one -ve geared (Sydney). I am still looking for the +ve cashflow properties that I am comfortable with.
‘Eat rich food, barbeque a yuppie’
daaj10242,
There is quite an interesting article in property investor magazine December 03/Jan 04 issue regarding Rental Yields which also talk about this gearing as well.
Those expert have different points of view regarding +ve,-ve,+- cash flow property.
Buy the magazine and have a read.
Warm Regards
ChanDollars
[Keep going, you’re on your way to financial freedom]Dom,
Let me give you an example.
Had you negative geared into waterfront property on Lake Macquarie two years ago your $6-800K investment would now be worth $1.2-1.4M.
This is why people negative gear.
Cheers,
Simon Macks
Mortgage Broker
[email protected]
0425 228 985Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
]
You must be logged in to reply to this topic. If you don't have an account, you can register here.
