Negative Gearing – What You Need To Know – Ep. 70

In this episode, we discuss negative gearing. This is the situation where your property makes a cash loss each year after factoring in interest costs. Some property investors steer clear of negative gearing others embrace it. 

The fact is that negative gearing typically occurs when mortgage repayments are high and when investors have purchased their investment property with 100% lending. This means that no 'real' deposit has been used to secure the property and the only cash that has been put into the property comes from the investor's 'top-ups'.

In the show, we discuss the good and the bad of negative gearing within property investment.