Should I positively or negatively gear my investment property?

Negative Gearing :

  • Negative Gearing is when you put in more than the rent you are earning to cover your expenses
  • These expenses then becomes a tax deduction, meaning you will pay less income tax
    • But you are still putting in $xx into your Investment

Positive Gearing :

  • When your rent is high enough to cover all your outgoings plus you receive on ongoing income from the difference
  • Yes your tax deductions are now far less but the upside is you are not putting in any money into your investment
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