Thanks to all that have replied. Appreciate the positive feedback. Just shows that I have a lot of homework to do … but that has never scared me.

Thanks again.

OK, my last attempt to illustrate my point.

House Rented for $140 /week = 7280/yr
Mortgage = 125/week = 6500/yr
Interest component = 100/wk = 5200 / yr
Therefore positive cashflow = 780/yr (7280-6500)

Considering tax ….
Tax liability = 48.5% x 7280 = $3530.8
Refund on interest component of mortgage =
$2522 (48.5% of $5200)
Therefore net tax…[Read more]

The same way a place can be negatively geared.

What I am saying is that the tax on the income should be viewed as a cost if your intention is to be cash flow positive and was asking if most people consider that to be the case. Like I said, I’m happy to be educated but since this wasn’t mentioned in the book (from memory), maybe I am missing something.

I take your point. But what I’m suggesting is that without considering the tax, what you may percieve as posite cash flow may actually not be when the tax is considered.??