A strategy where an investor accepts short-term losses on a rental property in exchange for tax benefits and long-term appreciation.
Negative gearing happens when the costs of owning a rental property — including mortgage interest, maintenance, depreciation, and other expenses — exceed the rental income it generates. The resulting loss can often be used to offset other taxable income, reducing the investor's overall tax bill. Most popular in Australia, where the strategy has reshaped property markets.
You own a rental property generating $25,000 in annual rent but $32,000 in deductible expenses (mortgage interest, maintenance, depreciation, etc.). The $7,000 loss can be used to reduce your taxable income from your day job, saving roughly $2,500 in taxes if you're in a 35% tax bracket. You're betting that long-term appreciation will offset the short-term loss.
Richify automatically calculates negative gearing and other key real estate metrics for every property in your portfolio. Instead of plugging numbers into spreadsheets, you get instant analysis with built-in AI-powered insights to help you spot trends and opportunities across your holdings.
A tax deduction that lets real estate investors write off the wear and tear of an income-producing property over time.
The net cash a rental property generates after all expenses including mortgage payments.
The increase in a property's market value over time.
The ratio of a property's loan amount to its appraised value or purchase price.
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