Just read a book by Noel Whittaker, “Borrowing to invest”. He states that “neg gearing is when income is less than INTEREST payments.” Nothing was said about other costs incurred that may reduce the income to make it a neg.
Is this the case?
If so,i would suggest alot more investors have POS geared properties than they thought![confused2]Originally posted by Misty1:Just read a book by Noel Whittaker, “Borrowing to invest”. He states that “neg gearing is when income is less than INTEREST payments.” Nothing was said about other costs incurred that may reduce the income to make it a neg.
Is this the case?
If so,i would suggest alot more investors have POS geared properties than they thought![confused2]115 posts , and you havent learnt anything
You’re being funny right Misty ?
You know the answer, but you just want to see if anyone else does….n’est pas ??
I think that has to be a typo.. as from what you correctly inferred, its negative geared when the income (rent) is less than the total expenses, which includes the loan interest and all other outgoings.
As you probably are aware, you can have a situation where the income is actuall greater than the expenses,(positive) or equal to the expenses (neutral) but by virtue of the non cost deductions such as depreciation and building write off, you still end up negative hence you get a tax refund.
The best situation in my opinion…..
Cheers…KP“Superted” (super at insults) 122 posts & u r obviously still a smart-ass.[angry2] Perhaps u didnt read it properly? The quote from that book which has left me wondering the truth,is that a property is neg geared when the INTEREST payments are more than the incoming rent. THERE WAS NO REFERENCE MADE BY HIM REGARDING WHETHER OTHER OUTGOING EXPENSES WERE INCLUDED. Why does it make me such a twit to ask for confirmation of something that has come from a financial expert, by the way? & me not being one? Isnt this what the the forum is all about? Sharing ideas?
It’s as obvious as the day that MOST people refer to a prop being neg geared if ALL OUTGOING EXPENSES are taken into consideration! DER!!Mind you,even if i didnt know that,& was brand new to this sight,your pathetic response certainly would have put me off ever asking another question! So next time keep your pathetic,useless “answer” to yourself.Misty,
As with many of these things, people have their own definition. I just see pozz gearing as the price i paid, and the rental yield %. If it is 10%, then i see my place as pozz geared… I know this is *vastly* different to how others might see it… many use complex formulas etc. Whittaker is a pretty good author, and he probably has some reference to why he’s saying that is his definition of poZz geared.
I think it was a perfectly legitimate post you made, Misty- please don’t lose heart.
kay henry
Misty1,
Positive geared IMO is quite simply, when after paying out ALL EXPENSES (i.e. rates, loan repayments, insurances, etc etc etc…and there can be heaps of etcs!!!) you have money LEFT OVER!!!
Negative geared is when you are having to dip into your pocket to meet all associated costs in having that property.
The level of rental yield is IRRELEVANT; whether you make 1% or 10% (after all expenses are deducted) a PROFIT is a PROFIT regardless!!!
Cheers,
Jo
I agree with Monopoly. You can’t just use the yield. I know of a few units that have quite an alrite yield that would be +ive geared that way, but they can have some $4.5k body corp that means you’re actually dipping into ur pocket to keep it.
You have to do a full analysis of all the costs really to make an informed decision
what’s in a name?… if the property is a dog it doesn’t matter if it is pos geared or negatively geared – it aint actually geared at all!
Extensive list of ‘Off The Plan’ property available for sale in Perth.John – 0419 198 856
Misty1,
Originally posted by Misty1:He states that “neg gearing is when income is less than INTEREST payments.” Nothing was said about other costs incurred that may reduce the income to make it a neg.
Is this the case?Your original post quoted the author then asked an obvious question hence my tongue in cheek reply. Sorry if you cant see the humour.
But now we have
[
Originally posted by Misty1:“Superted” (super at insults) 122 posts & u r obviously still a smart-ass.[angry2] Perhaps u didnt read it properly?
So now may i suggest you take 1 chill pill and have a lay down [biggrin]
Well,Mr Super insults,i see u cant resist getting the last insult in,eh? “Take a chill pill & lie down”? U obviously need some lessons on backing off.So,i suggest u do so.Why dont YOU take a “be nice pill,& bugger off”?
It obviously wasnt such an “obvious” qu,as u so wrongly put it,b/c there were a few differing opinions!
So,if u are such a property guru,why not give some constructive advice? Not pathetic wise cracks that are very rude & insulting?
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