The constant emphasis on negative gearing tends to make us all forget about that other real estate investment strategy – positive gearing.
It is, however, a strategy that is once again in the spotlight for a number of reasons. First of all, with interest rate cuts and falls in house prices, positive gearing opportunities have started re-emerging in some areas of the market.
Secondly, reductions in top tax rates over recent years have tended to erode the benefits of negative gearing.
Thirdly, with the consolidation of property prices throughout Australia, some investors are starting to again focus on the fact that it’s not all about growth.
A strong income flow is once again taking its rightful place as an important consideration in any decision to invest in property.
Positive gearing is popular among investors who are in a position where they have to think about their future retirement income. They are looking for positive rather than negative cash flow from their current and/or future investments.
Also, there are some younger investors who are weary of having to work harder and harder at a job in order to finance their negatively geared properties.
Their motivation is simple. The more positively geared property in their portfolio, the less they have to work.
It is important to explain what we mean by positive gearing since this term is sometimes used for investments that are in effect negatively geared. In simple terms your property is positively geared if it pays for itself and there is something left over.
When it comes to finding positive cash flow investment properties, good research and advice are as necessary as they are for any investment decision.
Baggetta & Co can now provide you with property solutions, whether it be for a residential, commercial or industrial property. We can now assist our clients with the structuring, selection and management of property investments for individuals and groups.
So if you are looking to invest in the property market, whether it be positive gearing or negative gearing, Baggetta & Co can assist you.
Just call me for a free, no obligation consultation to discuss your options. You can call me on 9317 7300.
February 2, 2017
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