A negatively geared property is a bad situation. It’s one that you leverage your finances to purchase as an investment, and then you subsequently realize you’re making less than the money it costs to maintain the property. It’s exactly what you don’t want to happen if you’re a real estate investor. You might be thinking that you can avoid such a situation because you’re going to flip the property, but what happens when you don’t find a buyer?

If you don’t find a buyer, you have to maintain the property. That’s actually what many investors want to do, or don’t mind doing, but they also want to make money. If you have property that is costing you more than you make, you’re in an upside down investment. Even if the property appreciates in value, you’re losing money each day. The longer you hold on to such a property, the more money you’re going to lose, unless you can turn things around.

What is a Negatively Geared PropertyYou have to think about how to either flip the property or get tighter on the finances and make the investment go into the green. What can you do to make things work? You don’t want to try to charge more for rent than the place is worth. You don’t get anywhere playing those types of cards. You’re looking out for your best interests as an investor, but you have to treat people right. That’s why it’s so important to make sure that you get a good property in the first place.

Yet these kinds of situations do arise. It’s just important to bring this matter up in your mind before you even purchase a property. If you do your due diligence, you’re not going to run into these situations near as often. When you do, you’ve hopefully got other investments to work on at the same time.

You see, there are times when properties are negatively geared for awhile but not indefinitely. What I mean is you might need to make certain upgrades, or you might not be able to find a renter for a few months. Then things turn around naturally. But there are also times when bad investments can be made, and properties aren’t going to turn around so easily. Therefore, it’s important that you do all you can to make the right investments in the first place as mentioned. That’s always important for real estate investors to consider.

Thank you to the Property Investment Newcastle team for the help. Visit their Twitter page for more information: https://twitter.com/InvestNewcastle