Many middle and higher income earners buy property for the negative gearing tax benefits. In many circumstances, by the time the property is held for around 5 to 8 years (increasing rents, with decreasing interest and depreciation expenses), the property becomes positively geared and is not tax advantageous. In fact – it will cost you.
Michelle Griffiths recently spoke about Investing in Property. Here’s a short video where she speaks about negative gearing, whether it’s worthwhile and dispels some of the myths around it.
If you are looking at buying an investment property, you need to have a plan. A plan should include what is important to you and your family and what you want to achieve financially. Once you have determined your personal goals and objectives and worked out the income you need (while working and in retirement) to fulfil a lifestyle that you want, only then can you work out whether an investment property is right for you.
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Disclaimer: The information contained is general in nature. Professional advice should be sought before acting on any aspect on this page. Financial planning services provided by TAG Financial Advisors Pty Ltd (ABN 77 154 205 017 AFSL 415632), a wholly owned subsidiary of TAG Financial Services Pty Ltd (ABN 67 075 374 686). Copyright 2022. Please do not reproduce without the expressed written consent of the author.