{"id":1081,"date":"2012-11-10T00:33:30","date_gmt":"2012-11-10T00:33:30","guid":{"rendered":"https:\/\/malyshka.com.au\/?p=1081"},"modified":"2012-11-10T00:34:18","modified_gmt":"2012-11-10T00:34:18","slug":"wealth-creation-via-property-investment","status":"publish","type":"post","link":"https:\/\/malyshka.com.au\/wealth-creation-via-property-investment\/","title":{"rendered":"Wealth Creation through Property Investment"},"content":{"rendered":"

\"\"<\/a>Wealth creation through property investment and negative gearing is least understood by many investors. It is often regarded as the property investor\u2019s best friend but when executed incorrectly can create a lot of financial headache.<\/p>\n

Negative Gearing<\/strong><\/p>\n

Negative gearing is a strategy where an investor buys a property in such a manner that the property costs are higher than the property income. That is, the yearly interest payable on the loan you have taken out to purchase the property and other related expenses involved in property maintenance exceeds the rental income generated by the property each year. With this, you experience a loss of cash but the tax system absorbs the effects of this loss, and ultimately the tax effects reduce your loss. So basically, your rental income and the tax man pay for your investment property!<\/p>\n

Tax Benefits of Negative Gearing<\/strong><\/p>\n

The Australian Taxation Office (ATO) allows investors to offset losses incurred from higher property costs to property income against the income from any other source. This might seem very kind of the ATO but you must consider several other factors before thinking of utilising this strategy. When using negative gearing you must always try to balance your repayments. If you fail to plan this aspect effectively, you may end up losing much more than you initially intended.<\/p>\n

Earn and Save Taxes at Once?<\/strong><\/p>\n

While many might try to sell you a negatively geared property based on the above statement, you must always remember that it is not possible to make money and save taxes at the same time. The losses incurred in a negative gearing strategy are real and you will need to physically overcome your tax or chash-flow shortfalls. You may have unrealised capital gains that are not taxable as long as you don\u2019t sell the property. But the problem with an unrealised profit is that you cannot use it easily. Accessing your unrealised profit can be a painful and expensive task.<\/p>\n

Negative gearing is an excellent wealth creation strategy but it is designed in a way to incur losses. This means you need to continue to work in order to balance the losses. The strategy does not provide enough financial freedom unless you have high income from other sources and get high capital growth. It definitely helps you gain wealth but if you are the sort of person who seeks an early retirement, it is not an ideal strategy for you.<\/p>\n

By partnering with Malyshka you will be able to buy property at near developer cost, have cash flow positive property, instant equity and in areas with potential high capital growth<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Wealth creation through property investment and negative gearing is least understood by many investors. It is often regarded as the property investor\u2019s best friend but when executed incorrectly can create a lot of financial headache. Negative Gearing Negative gearing is a strategy where an investor buys a property in such a manner that the property […]<\/p>\n","protected":false},"author":5,"featured_media":1096,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,6,13],"tags":[],"_links":{"self":[{"href":"https:\/\/malyshka.com.au\/wp-json\/wp\/v2\/posts\/1081"}],"collection":[{"href":"https:\/\/malyshka.com.au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/malyshka.com.au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/malyshka.com.au\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/malyshka.com.au\/wp-json\/wp\/v2\/comments?post=1081"}],"version-history":[{"count":0,"href":"https:\/\/malyshka.com.au\/wp-json\/wp\/v2\/posts\/1081\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/malyshka.com.au\/wp-json\/wp\/v2\/media\/1096"}],"wp:attachment":[{"href":"https:\/\/malyshka.com.au\/wp-json\/wp\/v2\/media?parent=1081"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/malyshka.com.au\/wp-json\/wp\/v2\/categories?post=1081"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/malyshka.com.au\/wp-json\/wp\/v2\/tags?post=1081"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}