Editor Teams
[ad_1]
What is so good about positive geared property? There are a lot of good things about this type of property and in this article I am going to tell you why they are good.
They Can Generate Your A Passive Income
Positive geared properties can generate you a passive income. This is because they generate more in income than they cost in expenses. In other words the rent you receive is higher than the expenses you have to pay (e.g. mortgage, maintenance etc). If you own enough of these properties you can eventually quit your job and live off the income your properties provide you.
If you invest in negatively geared properties then they COST you money every month to own. So you can quit your job and live off the income from these properties because you need the income from you job just to keep these properties.
Income Goes Up Over Time
Rent almost always goes up over time, but you one major expense, you mortgage repayment stays the same. This means that as rent goes up you are earning more money but your expenses aren’t going up by a lot. So you can either have more money in your pocket every month or you can pay off the loan of the property quicker. This means that over time it gets easier and easier to pay for the property.
There Can Be Less Risk
There can be less risk when you invest in positive geared properties because you are earning income from day one. With negative geared properties you lose money every month and you have to sell for a profit if you want to make that money back. However, if the property doesn’t go up in value then you can lose a lot of money.
With positive cash flow properties you make money from day one! This means even if you property doesn’t go up in value you can still make money through your rental income. So this can be less risky because there are two ways you can make money (rental income and capital gains) instead of only one way.
The Renter’s Buy Your House For You
In negative geared properties you are paying for the excess of your mortgage that the rent doesn’t cover. So you are buying the house with your own money. When the property generates a positive cash flow the people renting the property are paying off ALL of your mortgage. This means you buy a house but someone else pays for it. So someone is paying for you to own a house! It doesn’t get much better than that.
[ad_2]
Source by Ryan Mclean