Positively vs Negatively Geared Property

When it comes to investing in property, it’s important to understand the differences between positively geared and negatively geared property. Positively geared property is a type of investment that puts more money into the investor’s pocket than it takes out, whereas negatively geared property requires more money to be invested than what is made in return.

Positively geared property is a type of investment that has a higher rental income than the operating costs associated with the property. This type of investment can result in a net rental income that is positive each month, enabling the investor to save or use the excess income for other investments. Positively geared property can also be used to achieve capital growth, or increase in the value of the property, over time.

Negatively geared property, on the other hand, is when the investor is required to pay more in expenses than they receive in rental income each month. This type of investment is often used to help offset other forms of income, such as salary or wages, and can result in a tax deduction. While this type of investment can be beneficial in the long run, it can also be quite risky if the property market is not performing well as the investor may be required to cover the difference in rental income and expenses.

Both positively and negatively geared property can be beneficial for investors, depending on their financial goals and circumstances. Positively geared property can provide a steady stream of income and is a good option for investors who are looking for a more secure form of investment. Negatively geared property is a more volatile investment, but can also be beneficial for investors looking for a higher return on their investments.

Ultimately, it’s important for investors to do their research and understand the differences between positively and negatively geared property before making a decision. By understanding the risks and rewards associated with each type of investment, investors can make an informed decision that best suits their individual goals and circumstances.