Is negative gearing a smart move for my first investment property?

L

lazyfreeglyde

New Member
Anonymous because I feel like a bit of an idiot. Looking at investing in property, hoping for 3 or 4.

I spoke with an all-in-one buyers agent. Everything he said made sense except negative gearing. They take a low fee per purchase, no subscription.

Is negative gearing actually smart? I have equity in my home but won't use it as collateral. At 42, this is my ONLY chance to own my place. So I can only see using negative gearing under their structure as my way in.

I work FIFO but medical issues drained savings. I wan opinions on negative gearing and if it worked for anyone.
 
Negative gearing indicates that you are operating at a loss. It is also worth noting that the current federal government has significant plans to make changes to this arrangement in the upcoming budget.
 
Negative gearing means tthe costs of owning a property exceed its rental income.

Ideally, you want positive gearing to use rent as income for retirement or part time work.

Negative gearing lets you claim expenses, interest, and repairs, reducing your taxable income from your primary job.

Borrowing against your home usually covers 20% of the purchase price plus stamp duty and buyer's agent fees. This lets you use your home as a deposit without savings. A second loan secures against the purchased property.

Manage both loans until rent covers them, and you will never lose your PPOR. If you risk losing it, sell the investment property and settle the loan against your primary residence.
 
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