Ever wondered how some investors make money even when their property is losing cash each month? Let’s talk about negative gearing in Australia!
Negative gearing happens when the costs of owning a rental property—like mortgage interest and maintenance—are higher than the rental income. The investor takes a loss, but they can offset it against their taxable income, reducing their tax bill.
The goal? Property appreciation! If the value rises enough over time, the investor can sell for a profit—even after years of negative cash flow.
But it’s risky! Property values don’t always go up, and unexpected costs can eat into profits. So, do your research before jumping in!
Note: This information is for general guidance only and may not suit your individual circumstances. Please consult a qualified professional before taking action.
