Hi All, I am a newbie to IP’s and am keen to do a lot of homework and research before making any decisions. I do have 1 question that can probably be answered quite simply, sorry if it seems like a silly question I just need to get it clear in my head..
Is it the case that with most IP’s the loan repayments are more then what you actually get for the rent you will charge?RichLee, it depends on whether the property is positively or negatively geared. You will find negative geared properties on any corner but the challenge is to find yourself one that will make you money. Good luck with your search & make sure you educate yourself along the way.
Hello,
Its good to see you are treading carefully and learning about property before you buy it.
Unlike some people who have posted on this forum heheh.
It is true, probably 99% of residential property is negative geared. That means you lose money, the outgoings are higher than the income.
Why would anyone put up with that? There are many reasons but going for capital growth (selling property for big $$$) is the main reason.
Good luck in doing your research and don’t rush – I think the market is heading sideways (if not down) for at least the next 2 years.
Hi RichLee,
It depends on the amount of loan as well, if you put alot money for the deposit/principle, then you get lower repayment for the loan which may be covered by the rent. Nevertheless, may not be the smart way.
From FUN
Negative gearing is the old way of investing. It is commonly said that negative geared properties usually attract higher capital gains. I guess your research will identify the most suitable property for you to buy.
The Mortgage Adviser
http://www.themortgageadviser.com.au
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