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121. Negative Gearing
Manage episode 407359583 series 3559707
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Welcome back to another episode of the 360 Money Matters Podcast!
In this episode, we dig into the concept of negative gearing in property investment. We define negative gearing as incurring an income loss on a property with the anticipation of capital growth. Additionally, we provide an example to illustrate how it operates and highlight that depreciation can be claimed as an expense, even if the property is in a positive cash flow position. We also discuss some drawbacks, including increased risk, negative cash flow in today's environment, and the significance of selecting the right property for capital appreciation.
Furthermore, we underscore considerations such as cash flow support, personal money management discipline, adequate insurance, risk tolerance, time frame for holding the asset (preferably 10+ years), and the notion that higher income earners may benefit more from this strategy. We strongly encourage listeners to seek advice before implementing a negatively geared strategy, as it demands careful planning and assessment of individual circumstances.
Whether you're a seasoned investor or just starting out, this episode is packed with valuable information. Don't miss out – hit play now and take a step closer to informed and strategic property investment!
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This podcast contains information that is general in nature. It does not take into account the objectives, financial situation, or needs of any particular person. You need to consider your financial situation and needs before making any decisions based on this information. This information is provided by Billy Amiridis & Andrew Nicolaou of 360 Financial Strategists Pty Ltd, authorized representatives and credit representatives of AMP Financial Planning – AFSL 232706
Episode Highlights
About negative gearing
Example of how a negatively geared property works
Advantages and drawbacks of negative gearing
Importance of contingencies and strong money management skills
Who should consider negative gearing and the factors to take into account
Alternative investment strategies
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