For all those seasoned investors out there – what would be the first thing that would come to mind when speaking of CF neutral IPs? It'll cost nothing to hold and you have a property on the side, but if unexpected costs arise? Or interest rates go up? And it's still money being tied up somewhere.
Appreciate any input!
Thanks!
If you’re not making capital gains there is not much point being negative or neutrally geared. If you are making capital gains and they outweigh any unforeseen expenses that may arise then that’s the advantage. There’s no sense in investing in something that is standing still..
Point taken.
The IP I have in mind is in capital city metro area, with sales history since 2003 indicating there's been a 50-60% increase in values since. So they've doubled for a decade. That's not to say it'll happen again in the next 10 years, but it's a comforting thought, at least, that the area's been growing.
Nothing wrong with neutral gearing if the property goes up in value.
Rental returns may be able to increased or you can pay down debt (if there is no non-deductible debt on your balance sheet) both of which will increase your rental returns.
NG is basically losing 100% to save 42% tax. Makes sense not!
The pay off is capital gain. Neutral property or slightly ng is a better cashflow position to take.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
