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Positive gearing the way to go - article with Michael Xia

Discussion in 'General Property Chat' started by Westminster, 28th May, 2016.

  1. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    Last edited: 28th May, 2016
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  2. bob shovel

    bob shovel Well-Known Member

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    I'm keen to see the FB news.com.au comments:D they're always sooo smart!
     
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  3. RedMarty

    RedMarty Well-Known Member

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    Nice. Good positive story.
     
  4. D.T.

    D.T. Adelaide Property Manager Business Member

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    Good on you MX :)
     
  5. Michael_X

    Michael_X Mortgage Broker Business Member

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    Haha, thanks. A topic I thought was good with all the negative gearing in the media.

    Cheers,
    Michael
     
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  6. kierank

    kierank Well-Known Member

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    I like the quote:
    "Who in their right mind will go into business knowing they’ll lose money?"​

    My answer probably every/most start-up businesses (even ones starting a property portfolio). Over times, all businesses aim to make a profit.

    I don't think that too many start-up businesses aim to stay small and/or to make losses for ever.
     
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  7. bez23

    bez23 Well-Known Member

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    My property portfolio is returning more than 8% but I still use negative gearing (with depreciation and other costs) to return it to positive cashflow. Strictly positive gearing is quite rare these days even in the locations that Michael invest in.
     
  8. Lenny

    Lenny Well-Known Member

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    Well said Michael.

    It amazes me how one sided the media can be sometimes.
     
  9. Michael_X

    Michael_X Mortgage Broker Business Member

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    I actually told the reporter that my properties were positive cashflow, but negatively geared come tax time. I guess that didn't make the cut on the article.

    Cheers,
    Michael
     
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  10. mrdobalina

    mrdobalina Well-Known Member

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    Ummmm... isn't that negative gearing?... and goes against the grain of the whole article?
     
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  11. ZOMG

    ZOMG Well-Known Member

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    Well done Michael!
     
  12. Eric Wu

    Eric Wu Mortgage Broker Business Member

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  13. Eric Wu

    Eric Wu Mortgage Broker Business Member

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  14. Michael_X

    Michael_X Mortgage Broker Business Member

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    The sentiment I was trying to get across was buy properties that are cashflow neutral or positive, don't buy properties with the aim of negative gearing.

    Cheers,
    Michael
     
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  15. Beanie Girl

    Beanie Girl Well-Known Member

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    Noice! :)
     
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  16. joel

    joel Well-Known Member

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    Very good. If negative gearing is abolished then positive gearing should be too. I look forward to not paying tax.
     
  17. mrdobalina

    mrdobalina Well-Known Member

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    I guess the article will have different tone to it if they quoted you saying "buy cashflow positive properties, but still negatively gear your taxable income".

    There'll be a riot from the Gen Y and Millennial readers!
     
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  18. bez23

    bez23 Well-Known Member

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    That's totally misleading then. Since this strategy relies on your taxable income bracket. People earning >180k will have a much easier time to get positive cashflow whilst negatively gearing property. That said, I doubt that many investors in PC will actually have true positvely geared property if you account for 105% borrowing.
     
  19. MTR

    MTR Well-Known Member Premium Member

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    I suppose it would be difficult to achieve true cash cows from resi property today, especially considering at least 3 markets have boomed over the last 3 years.

    Comes down to strategy, if you are a developer you can certainly end up with cash flow positive properties, but you would most likely need to sell down to achieve this.

    There is also the strategy of building g/flat at rear for income.
    Finding a property where you can renovate sell front and build new at rear or sell off land at rear.

    My USA properties and that's another story for another thread are achieving over 25% gross rental income now. That does not include the currency play, tack on another 25% at least.
    Today between 10-15% is still achievable.

    I guess you have to look outside the square if you want cash flow, not impossible but requires more work.
     
  20. MTR

    MTR Well-Known Member Premium Member

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    you know what regardless you were honest and well done for what you have achieved to date.
     
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