What is positive and negative gearing?
Simply put, gearing refers to the net income generated by a property. To calculate this, take the gross income (rent etc.) and deduct all the expenses (interest on mortgage payments, rates, insurance, maintenance, body corporate and management fees etc.). If the outcome is a positive figure, the property is referred to as positively geared and vice-versa. However there are a number of other factors to consider when deciding on a particular property investment strategy. If you are considering purchasing an investment property, seek independent, professional advice.
