Positive Gearing
Positive gearing happens when a property’s rental income exeeds its ownership and maintenance costs.
Quick Reference:
Investment Strategy. Ongoing Income. Positive Cash Flow.
Expanded Explanation:
A positively geared property earns more income from rent than it costs to own. This means the investor receives surplus cash each month after paying expenses such as interest, rates and management fees.
In Australia, positively geared properties are often found in regional areas where prices are lower but rental yields are higher. The stready income can be appealing, though these properties may not grow in value as quickly as those in higher priced markets.