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Rental Property & Negative Gearing

The investment property has long been the investment of choice for the mum and dad investor. Understanding the tax benefits of negatively gearing a property is vitally important to the decision making process of which property and who should purchase it.


Negatively gearing is when the expenses such as interest and holding costs of the property outweigh the income derived from the property to produce a loss. This loss can be used to reduce your income from other sources and in turn reduce your tax obligation.


Jeffkins accountancy has been helping Melton clients with these types of tax effective investments for years. We have aligned ourselves with the best financial advisors and mortgage brokers to ensure the process of purchasing an investment property is as easy and enjoyable as possible. We have also developed some useful tips to consider when purchasing a property.


Useful tips to consider when looking to buy a rental property


  • The quality of the neighbourhood in which you buy will influence both the types of tenants you attract and how often you face vacancies.


  • Property taxes such as stamp duty are not standard across the board and, as an investor planning to make money from rent, you want to be aware of how much you will be losing to taxes.


  • Your tenants may have or be planning to have children, so they will need a place near a decent school. When you have found a good property near a school, you will want to check the quality of the school as this can affect the value of your investment.


  • No one wants to live next door to a hot spot for criminal activity. Go to the police or the public library for accurate crime statistics for various neighbourhoods, rather than asking the homeowner who is hoping to sell the house to you.


  • Locations with growing employment opportunities tend to attract more people – meaning more tenants.


  • Check the potential neighbourhood for current or projected parks, malls, gyms, movie theatres, public transport hubs and all the other perks that attract renters.


  • If there is an unusually high number of listings for one particular neighbourhood, this can either signal a seasonal cycle or a neighbourhood that has "gone bad." Make sure you figure out which it is before you buy in.


  • Rental income will be the bread and butter of your rental property, so you need to know what the average rent in the area is. If charging the average rent is not going to be enough to cover your mortgage payment, taxes and other expenses, then you have to keep looking.

Useful Links:


ANZ - loan calculators


Mortgage Brokers






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