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Junior Member
Negative Gearing
First of all hello everyone, ive been reading posts for the past few months and have found them all really helpful on the road to buying my first Investment property.
I have a couple of questions.
First of all, i have read a fair few books on residential Investment property and quite a few warn against negative gearing and negative cashflow. I agree in the fact that you cant have too many investments taking 50-$100 week out of your regular income.
However when i start to run the numbers, i find it very difficuilt to see a property anywhere (im currently looking in Tauranga) that reaveals positive or even a balancing cashflow.
As an example, looking at the estimates from the many different bank websites a 230,000 home less a fairly good deposit of 50,000 ($170,000). The payments per week are around the $300.00 mark. Whereas a 3 bed house in a healthy area of Tauranga averages rent of around $250.000. Thats $50.00 a week behind.
I dont mind too much topping it up with my own finaces as i know a tenant is imporoving my equity by 250.00 ever week (without even adding in the capital gain). Its just that i have seen a lot of reccomendations against it. I thought i would just throw the topic up to see
And finally, i am currently living in Japan and will return to NZ a around a year and a half (supposedly a the start of the down cycle). Would people reccomend entering the world of Investment property a this stage? I have heard people suggest that you should just get yourself in the game regardless of where the cycle is.
Also with this time up my sleeve could anyone reccomend a book or series of books that will help me continue my Education with Investment property (i have done most of Robert K`s stuff)
Also (sorry i have more questions than i though). I have both $80,000 of equity in my current home and $50,000 of cash. What do people suggest as a deposit on a Investment home....both or one or the other?
Thankyou very much
Keep up the interesting posting
Matt
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