Basics of Negatively Geared Property

What is negative gearing

We all know that a negative geared property can be great for tax write offs but let’s have a look at what other things make a negatively geared property worthwhile.

“Negative gearing is a form of financial leverage whereby an investor borrows money to acquire an income-producing investment and the gross income generated by the investment (at least in the short term) is less than the cost of owning and managing the investment, including depreciation and interest charged on the loan (but excluding capital repayments). The investor may enter into a negatively geared investment expecting tax benefits or the capital gain on the investment, when the investment is ultimately disposed of, to exceed the accumulated losses of holding the investment. The investor would take into account the tax treatment of negative gearing, which may generate additional benefits to the investor in the form of tax benefits if the loss on a negatively geared investment is tax-deductible against the investor’s other taxable income and if the capital gain on the sale is given a favourable tax treatment.”

Source : https://en.wikipedia.org/wiki/Negative_gearing

Negatively geared property can certainly still create a profit if the need for the asset gains after a while to ensure that any capital gain covers the losses made during the life of the investment. It is also profitable if income increases as time passes and covers the cost of interest around the amount borrowed for your investment. Rates could also reduce and this can lead to the income from rental becoming more than the costs. There are specific investors that will try to find the negatively geared property in order to help them to reduce their tax liabilities by permitting the losses from your property being offset against their other income.

This strategy to investment might be disastrous when property values usually do not rise, plus, in such negative economic scenarios, income from rents is likewise likely to fall, ultimately causing additional losses. The investor then gets locked in to the property investment and should have the capacity to sustain losses till the market situation improves. In these cases, your capital brings you no returns whatsoever, and you should keep investing in money till the economic scenario changes for that better. At such times, the investor will need to require a ask whether selling your property confused will save him long term losses.

Buying negatively geared property is great when property values are rising, nevertheless, you must be equipped for any downturn and also ride out the bad times. Taking the advice of experts and fully understanding tax implications can help to go ahead and take right decision. Negative gearing makes for over-investment in rental property, that may cause an economic distortion. Property prices go higher and this makes it difficult for folks who are interested in buying property for his or her own use. The notion that tax deductions will be helpful is only for those who have high incomes and would like to reduce their tax liabilities. You should have another income that will enable you to bear the additional expenses from the negative gearing.

If you would like some negative and positive geared property options in the Newcastle and Central Coast areas see the team at Property Investment Newcastle.

Please be aware that the information contained on this website has been provided as general advice only. The contents have been prepared without taking account of your objectives, financial situation or needs. You should, before you make any decision regarding any information, strategies or products mentioned on this website, consult your own financial advisor to consider whether that is appropriate having regard to your own objectives, financial situation and needs.

admin / June 12, 2018 / Property Investment

Common Mistakes To Avoid In Property Investment

Property Investment

There are many common mistakes that people make with property investment and the interesting thing about it all is that it is easy to avoid these issues. Avoiding these issues is all about doing your due diligence and not just blindly investing into something you believe in. If anything as a future successful property investor, you have to become very skeptical about every property that you come across. You should probably ask what is wrong with it more than what you love about it. This attitude alone will save you a lot of money and prevent you from having a lot of financial heartache.

One thing that lots of property investors fail to do is to properly have their properties inspected. They might have a basic inspection done and that’s it. But it is good as a property investor to create a relationship with the company who you can trust to do a very thorough inspection of any property that you are considering purchasing. A trusted professional will be able to tell you every little thing that is wrong with the property, though be able to tell you what has been repaired and what type of repairs you might expect in the future.

Another mistake that property investors make is not understanding the true value property. They don’t pay attention to the trends in this particular neighbourhood, they don’t understand the neighbourhood at all, they don’t know how much homes have sold for and they don’t understand the true value of the property. The more homework that you do as a property investor the better off you will be. The name of the game is to research everything that you can and to ask all the big questions that have to be asked.

Another issue that people make with property investment is choosing to quickly. They get into the competition and the dream of having an investment property to the point that they just don’t do their homework. If you pay attention, speak a lot about research and doing your homework because these are the most important things. These are the things that will help you know if her property truly is worth the money that it is being listed as and if you’ll be able to turn a profit. So homework in life never ends it only becomes more detailed and specialised to improve your chances of a successful investment.

As you can see, there are many common mistakes to avoid with property investment. In this article we were only able to talk about the most important ones that people typically make. Just changing these few things when it comes to property investment will be greatly beneficial to you. Of course another way to minimise risk of mistakes is to enlist the services of a professional company such as Property Investment Newcastle.

So please put this information and to good use and don’t store it away in your mental file cabinet instead use of information to make great property investment decisions. It really doesn’t take a lot to be a bad property investment and likewise it doesn’t take a lot to become a good one either.

admin / March 12, 2018 / Property Investment

The best time to sell your home

The best time to sell your homeWhen Is It The Best Time To Sell Your Home?

Selling your home is not just a financial decision, but an emotional one that can negatively impact your stress levels if great care isn’t taken during the selling process. Bear in mind that it’s important to evaluate certain factors before making the final call to list your home for sale. When it comes down to it, you have to ask yourself: what is the local real estate market like? You may be ready to let go, but buyers may not be willing to pay your asking price.

When To Sell During The Year

Careful consideration must be given to when you’re looking to list your home for sale, and many studies support the idea that people will first start looking for homes in spring when the weather isn’t so bad. It’s common sense that listing your property during the warmer months of the year will yield better results than looking to unload during a snowstorm. Of course, experts do agree that taking the time to research local real estate trends does help as your locality may still have a booming market in the fall!

Zillow is a great website that you can use to search for sold listings in your city and to help draft an idea of when to list your home. Best of all, the website provides cold hard facts and you don’t have to go with your gut feeling to know whether it is or isn’t the right time to list. Don’t forget that if you live in an area with a year-round warm climate, your selling window may significantly increase.

When The Time Is Right For You

Listing your home for sale is also an emotional process and not one that can be readily analyzed by looking at Zillow data. You need to consider financially and emotionally whether or not the decision is right for your family. For example, if you need to relocate for work or your family is growing, it makes sense to sell your home as soon as possible, but in some instances, you may not even have a timeframe in mind.

Only you can personally determine how much of a connection you have to your home. If you grew up in the house or watched your children leave the nest, it may be harder to let go— and that’s okay! You can give yourself plenty of time to sort through your emotions and to rid yourself of accumulated clutter over the years.

Does the home still work for your personal needs? If you’re an empty nester, you may not need all of the space. It’s important to look at what a home has to offer in terms of potential when considering whether or not it’s the best time to sell.

Selling a home and getting rid of the past can be an emotionally draining journey. It’s doubly hard if you need to make the choice due to finances and not necessarily because you want to. At the end of the day, listing the home during the warmer months of the year and sorting through your emotions can help you gauge when you should sell.

In Sydney and ready to buy? Mortgage Broker Northern Beaches can help you to find the right loan for you.

admin / November 28, 2017 / Mortgage Brokers, Property Investment, Residential Loans

Property Investment Newcastle

Property investment can be a very effective way to build wealth. However there are various factors that need to be considered before taking the step into the investment world. 

Property Investment Newcastle

To be honest, investing into property sounds easy, but there can be some huge repercussions if not done well. This is because we’re talking about huge sums of money and if you make an error, then it could cost you dearly.

This is where specialists such as Property Investment Newcastle become important to wealth building strategies. These guys are experienced in building investment portfolios for the most inexperienced investors. In fact, the team at Property Investment Newcastle are capable of structuring an investment portfolio that will see your home loan paid off in as little as 8 years.

These guys are so experienced in investment properties that they can source investments to suit your financial needs. This is accomplished by sourcing properties in areas that are ripe for capital growth and capable of returning a net profit – as opposed to negative gearing.

It is worth noting that experience in property investment is key. Anyone can come up with some coin and get a loan for an investment property. That’s a risk. But if you chose to use a team that are experienced in the field, your risk is reduced considerably.

Consider our team in Newcastle – our guys are super focused on producing results, not only in Newcastle but Australia wide. These guys know how to find areas that not only will grow in capital gains, but will produce a rental return worthy of any investor.

For most people, investing in property is achievable, as long as you’ve some sort of equity or cash investment can be done. However, for most people, time is an issue. How can you spend hours and hours researching when you are already busy working and looking after family, etc. etc. – this this is where our guys come into play: they can do this all for you.

If you have any inclination of investing in property, then at the least a consultation is recommended. As mentioned, our team in Newcastle can not only procure profitable investments but will structure a portfolio to see a mortgage paid off early, or an early retirement, or expansion of the investment portfolio, or a combination of the previous.

It’s really crazy that more people aren’t onto this. It’s not rocket science, it’s not some crazy scheme – it’s just some well thought out strategies and it will see you living a decent lifestyle quicker than you know it.

Imagine having someone else pay off your mortgage, no interest, no regular payments, surplus funds, etc. etc. –  our team can actually achieve that for you.

admin / March 12, 2017 / Property Investment