Investment Strategies
Let’s simplify what can often feel complicated. An investment strategy is simply your plan for investing your money. Still unsure? Here’s a breakdown:

Rentvesting
Enjoy the flexibility of renting while benefiting from the stability of owning. Rentvesting is a popular strategy for first-time investors, allowing you to rent in the area you love while investing in a property elsewhere.

Use Your Home to Buy Another
If you already own a home, you can leverage its equity to help fund a deposit on another property. Keep in mind, equity isn’t “free money.” Accessing it means your loan balance and repayments will increase.

Positive and Negative Gearing
What’s the difference between the two, and which one suits your investment goals?

Positive Gearing occurs when your rental income exceeds the costs of owning and managing the property (loan repayments, interest, maintenance, etc.). In short, your property supports your finances and can generate additional income. However, you will be taxed on this extra income.

Negative Gearing is the opposite. It happens when your rental income is less than the costs of owning and managing the property, and you must cover the difference. Negative gearing allows you to claim tax deductions on expenses related to owning the property, and the property’s capital growth will likely outweigh the short-term losses as it appreciates over time.

Please note that negative gearing is unique to Australia, and there have been discussions about its removal. Be aware that it could be abolished at any time, so it’s important not to base your investment strategy solely on negative gearing.