The answer to this question is, "It depends on the scenario". If you are planning to buy a rental property that is cash flow negative, you need to look at the future capital growth potential and the land size of the property, i.e. is this a subdividable section or is there value left in the property which you can use to refinance later?
The current tax law allows that any losses generated against cash flow negative rental properties can be claimed against your personal income if structured correctly. This means that if your average tax rate is 33%, for every dollar of loss, you will get 33 cents back.
We had the good fortune of attending the Property School this year and it was worth every cent of our investment. All the sessions were jam packed with useful information and We thoroughly enjoyed every minute of our time here. Matt, Janet and John all have a different style of teaching yet I'm really impressed with the depth of knowledge each of them possesses. What you will learn here is a combination of theories and practical knowledge that you can take advantage of straightaway and apply in the real world. Give them a call today and book for the next session! - JL & XY - December 2017
Gilligan Rowe and Associates is a chartered accounting firm specialising in property, asset planning, legal structures, taxation and compliance.
We help new, small and medium property investors become long-term successful investors through our education programmes and property portfolio planning advice. With our deep knowledge and experience, we have assisted hundreds of clients build wealth through property investment.
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