Positively or Negatively Geared

I love opening a can of worms but it's not what I'm trying to do just at the moment.

I've got very strong opinions already formed on this so I'll ask that we can avoid opinions on this thread. I'm trying to see a rough percentage of what the forum members are up to so I can compare it to the general population of investment property owners (for my own ulterior motives of course)

This doesn't include development sites guys, just properties that you're holding long term.
If you've got more than one type, choose the one you have the most of.

 

Don't leave us in suspense - what are your ulterior motives?

 

Positive in front at the moment, I think this has something to do with historically low interest rates, if we were at 8% then it may be a different story.

 

Mostly positive, not really a fan of money sinks

 

I am staying away from this one as I have already been told off :

 

I don't see rates moving up much in the immediate term. But if I wasn't sitting positive now I would want to have a very clear plan of how I would service the the debt if they did move up.

 

Where's the option for both?
Mostly positively geared.
A couple negatively geared positive cashflow.
2 negatively geared for the time being.

No one likes losing money, fact, not an opinion.

 

Agree.
All but recent investors at high LVRs would likely be positive in this environment.

 

Negative. Only one is very negative and in a non-growth environment, and unfortunately I tried to sell it but couldn't.
I've got very high LVRs (no LMI up to 95%...). I've deliberately scaled this up at this stage to try to accelerate necessary equity in a cash flow rich environment. Time will tell if this attempted 'short cut' works, but plan B is plugging away with other things. I need the equity to fund plan C.

 

Overall portfolio is positive. Now what's this going to cost me?

 

ummmm. what about an option for all three?

i doubt many would have all positive or all neutral unless they bought 20 years ago or they have lots of cash

 

Overall slightly negative but not far from neutral.

The next purchase will hopefully

 

An option for all three is as statistically relevant as having no answer at all.

 

Are you trying to say you have negative geared properties with positive cash flow?
I'm going to assume this one's a typo.

 

No
Definitely possible using either depreciation or nras payment to put the cashflow in the green while still making a loss through the year.

 

No not a typo, rent+refund>interest+expenses.

A negatively geared property which produces a on paper loss which, when the tax refund is considered is cashflow positive.
It's a better situation than a negatively property which affects cashflow but not as good as a positively geared property.

 

That's just long winded way of saying positive cash flow. Once you take all expenses, tax, income and rebates into account it either puts money in your pocket or takes it out.

For the sake of the poll, do you profit at the end of the year or make a loss?

 

I know I said I was trying to avoid opinions but here I am stirring the pot.

If you have to rely on depreciation to make your property cash flow positive you should have chosen or manufactured a better property. I'm all for using depreciation to further extend a property's yield but it should already be producing an income before that.

Don't forget that to claim depreciation, your property must depreciate. That means you're losing value in your building. Call me a purist but I do not consider using a loss to offset a loss a profit.

If you're one of these people who go "there's been no positively geared properties since the 90s" then you should be doing a subdivision or another form of value add to create a capital gain that will pay down the mortgage and make the property positively geared.

To pay tax means you are profiting. No one ever went broke from making a profit.

 

According to who?
Your banker? Or your accountant.

 

I'm not ripping on you, you're a 100% correct to say it is better than a negative cash flow property. For the sake of clarity I personally refer to this as a cash flow positive property because at the end of the day, you're getting money in your pocket.