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Negative gearing and positive gearing...

When it comes to investing, the term 'gearing' refers to borrowing to buy an asset.  Most investors use some gearing in the form of their mortgage, to fund their rental property.

Negative gearing...
Negative gearing occurs when the cost of owning a rental property outweighs the income it generates each year.  This creates a taxable loss, which can normally be offset against other income including your wage or salary, to provide tax savings.   click here to read more....

Risks associated with negative gearing...
While there are some certain benefits associated with negative gearing, it isn't without its pitfalls.   When you negatively gear your property, you still record a loss.  And a loss is a loss is a loss!    click here to read more....

Minimising the risks of negative gearing...

Positive gearing...
An investment is positively geared if it earns more in rental income each year than it costs to own the property.
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sourced from Mortgage Choice