Is Negative Gearing Right for Me?
Negative gearing is one of the most talked-about property investment strategies in Australia — but that doesn’t mean it’s right for everyone.
If you’re asking this question, you’re already doing the right thing. Negative gearing isn’t something to jump into blindly. It works best when it aligns with your income, cash flow, and long-term goals.
Here are the key questions to help you decide whether negative gearing could be right for you.
Can I Comfortably Afford the Ongoing Costs?
The most important question is about cash flow.
Negative gearing means the property will cost you money to hold — especially in the early years. Even with tax deductions, you’ll still be contributing money from your own income.
If those ongoing costs feel manageable and don’t put pressure on your lifestyle or savings, negative gearing may be worth considering. If they would cause stress, it’s usually a sign to pause.
Is My Income Stable?
Negative gearing generally suits people with stable, reliable incomes.
Stable income makes it easier to manage holding costs and cope with changes such as interest rate rises, repairs, or short-term rental vacancies.
If your income fluctuates or feels uncertain, it’s important to factor that risk into any decision.
Am I Investing for the Long Term?
Negative gearing is rarely a short-term strategy.
Most people use it while aiming for long-term capital growth. The expectation is that over time, the property increases in value and becomes easier to hold as rent rises and loans change.
If your goal is quick returns or short-term income, negative gearing may not align well with your plans.
Do I Understand the Tax Benefit — and Its Limits?
One of the biggest misconceptions is thinking negative gearing means you “get the loss back” at tax time.
In reality, tax deductions usually return only a portion of the loss, depending on your tax rate. You still fund the rest.
Understanding this upfront helps ensure expectations are realistic.
Does It Suit My Tax Position?
Negative gearing can be more beneficial for people in higher tax brackets, where the deductible loss offsets income taxed at a higher rate.
For others, the tax benefit may be smaller.
This is where guidance from tax professionals such as
The Accountants
is important to understand how negative gearing applies to your specific situation.
Do I Have a Financial Buffer?
Property investing rarely goes exactly to plan.
Unexpected repairs, interest rate changes, or periods without a tenant can increase costs. A financial buffer helps ensure negative gearing remains manageable rather than stressful.
If you don’t yet have a buffer, it may be worth building one before investing.
Is My Loan Structure Set Up Properly?
How your investment loan is structured can significantly affect whether negative gearing works for you.
Interest rates, repayment type, and offset usage all influence cash flow and affordability.
A well-structured loan can make the strategy far more comfortable over time.
Am I Doing This for the Right Reason?
Negative gearing works best when it’s part of a broader investment plan — not just a reaction to tax.
If the main motivation is “saving tax” without considering cash flow and long-term goals, it’s usually worth slowing down and reassessing.
There’s No Universal Yes or No
Negative gearing isn’t good or bad on its own.
It’s a tool — one that works well for some people and poorly for others. The key is understanding whether it fits your income, lifestyle, and long-term plans.
How Chase Helps You Work It Out
While negative gearing is a tax concept, the finance structure behind the investment plays a major role in whether it’s right for you.
Chase Douglas has extensive experience in mortgage lending and helps investors understand how loan structure, borrowing capacity, and cash flow affect strategies like negative gearing.
Chase focuses on clarity — helping you understand whether the numbers work for your situation before any decisions are made.
So — Is Negative Gearing Right for You?
If you’re asking the question, you’re already on the right track.
You don’t need to decide today — but understanding how it would work for you is essential.
👉 Book a conversation with Chase Douglas to explore whether negative gearing aligns with your income, cash flow, and long-term goals.
Good investment decisions start with the right questions.
