When planning the October issue of Money, the team set out to answer the question, does negative gearing still work?
As Bryce Holdaway, partner of specialist property investment advisory firm Empower Wealth and co-author of The Armchair Guide to Property Investing, explains in the issue’s cover story, the answer is yes.
But the topic is a complex one. In response to queries from readers, Bryce has put together this video to give further clarification around how the loan is repaid.
While repayments on the mortgage are set at interest-only, all surplus cash flow goes into offset accounts.
Ultimately the offsets will have equal cash reserves to outstanding loans and each investor has the choice to keep the cash in offset or eliminate the loans entirely.
For the full story, grab the October issue of Money, out now.