Hi Dean - while I was picking up the 8th edition S&P I had a look at your latest video blog about negative gearing and it raises a few issues:
A couple of years ago you were Mr positive cashflow only, and now you're big on negative gearing. Why the change? Ok, the whole market has changed so maybe negatively geared is the only kind of property you can buy now?
You didn't talk about any of the risks tho. You assume the market will go continue to go up year after year but history has shown this just doesn't happen. And no I don't buy the argument "it's different this time".
Sure over the long term property prices have always gone up but there have been significant down times too where a lot of people without sufficient cashflow have gone to the wall.
Also, negative gearing affects servacibility with lenders so surely this will be limiting when it comes to acquiring more properties.
Dean - this isn't a criticisim of what you're saying. I recognise that times have changed and everyone needs to look for new ways of making it happen. I just want to know how you propose people deal with these issues.
Cheers
Gerrard
A couple of years ago you were Mr positive cashflow only, and now you're big on negative gearing. Why the change? Ok, the whole market has changed so maybe negatively geared is the only kind of property you can buy now?
You didn't talk about any of the risks tho. You assume the market will go continue to go up year after year but history has shown this just doesn't happen. And no I don't buy the argument "it's different this time".
Sure over the long term property prices have always gone up but there have been significant down times too where a lot of people without sufficient cashflow have gone to the wall.
Also, negative gearing affects servacibility with lenders so surely this will be limiting when it comes to acquiring more properties.
Dean - this isn't a criticisim of what you're saying. I recognise that times have changed and everyone needs to look for new ways of making it happen. I just want to know how you propose people deal with these issues.
Cheers
Gerrard
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