Looking for property investment advice? One of your first questions should concern gearing.
No, we're not talking about cars – when it comes to gearing and residential investment property, the two words you need to focus on are "positive" and "negative".
Despite their names, the different types of gearing don't stand for good and evil. However, they do represent very different investment strategies.
If you're in the market for extra income through property investment, chances are positive gearing will be the strategy you choose.
So what is positive gearing? Well, if you buy a house that brings in more money than you have to pay in expenses before taxes, it's positively geared.
And let's be honest, unless you're specifically seeking tax savings, you'll want a positive cash flow property that leaves you with more money at the end of the financial year. Of course, finding the right property for positive gearing can be easier said than done.
The right rental yield is key
Renting out a home in the right area can provide you with a steady flow of cash. While growth is important, the right rental yield will provide you with more immediate benefits.
The experts at Goodlife can help you analyse different properties and locations to determine if it will provide sufficient rental yields for your investment. If it doesn't measure up, we'll take it off the table.
What's important to keep in mind is that investment costs money, and the more you can reduce out-of-pocket costs, the easier it will be to enter the market and get your investment working for you.
Helping you accomplish this is our mission, whether you're seeking investment property in Auckland, Hamilton or beyond.
Here's to your financial independence!
Daniel Carney
Authorised Financial Adviser / Investment Property Expert