Annual Negative Gearing Loss/Gross Property Value %...Poll!

[Harris]

i cant find a really valid explanation as to what it indicates. Perhaps how long people have held their propertys, but the percentage is going to be skewed depending on the gearing and the growth achieved.

i guess the percentage indicates where everyone is sitting in terms of equity and cash flow but means nothing as peoples individual circumstances will tell more of a tale.

please explain JIT

just a general poll to get a surface look at the cost of carrying the prop portfolio for most investors these days...

problem with polls is that they are very limited in their scope however still valid to get a general feel

 

[alexlee]

just a general poll to get a surface look at the cost of carrying the prop portfolio for most investors these days...

problem with polls is that they are very limited in their scope however still valid to get a general feel

The poll totally ignores tax effects and depreciation. My situation looks pretty crappy if you just do a rent - interest calculation. When you include all my other investment income, depreciation and effects of tax deductions, it looks a LOT better.
Alex

 

[steveadl]

The poll totally ignores tax effects and depreciation. My situation looks pretty crappy if you just do a rent - interest calculation. When you include all my other investment income, depreciation and effects of tax deductions, it looks a LOT better.
Alex

Ditto. Not giving an accurate picture.

 

[JIT]

just a general poll to get a surface look at the cost of carrying the prop portfolio for most investors these days...

problem with polls is that they are very limited in their scope however still valid to get a general feel

Essentially yes that's right Harris.

I'm not going to argue much about the merits of the poll.

I've given some general 'guidelines' so people can vote with some consistency and with simplicity.

If it makes your position look not so flash, I don't really care!

If you want to add up all the extra property costs and calculate the tax effects too...just for the sake of a silly poll - go right ahead !

 

[josko]

Also, exclude your PPOR in your calculations of current gross property value as it's (usually) not being negatively geared (not earning you any rent)...thanks.

Poll: 3.3%

Sorry, I already voted and like Steve am including my PPOR.

1. I have a tenant in a self-contained unit attached to my PPOR - (always making a buck!)
2. My PPOR is one of my main sources of Capital Growth and I wouldn't be so negatively geared if I hadn't borrowed so much from it to purchase my properties.

Isn't this what most of us do?

If I take out my PPOR and the rent attached to it - Woo Hoo!%# I'm at 1.6%!

If I include the interest from the monies I've taken from my PPOR to buy IP's - I would be at 3.8%!

GoAnna:

Maybe it comes down to your definition of "negatively geared". In my books gearing is borrowing and negative means that it is running at a loss. Whether that loss can be offset against other tax paid in another thing again.

Yes, some interesting thoughts on the defination of Negative Gearing. I'm with GoAnna.

 

[stumunro]

Essentially yes that's right Harris.

I'm not going to argue much about the merits of the poll.

I've given some general 'guidelines' so people can vote with some consistency and with simplicity.

If it makes your position look not so flash, I don't really care!

If you want to add up all the extra property costs and calculate the tax effects too...just for the sake of a silly poll - go right ahead !

No arguement necessary was just curious of your train of thought.

 

[jingo]

Currently at 1.2%. As Jit requested doesn't include holding costs (rates, water, insurance, etc, etc) but my tax return cancels these out anyway. PPOR is excluded otherwise the figure would be 1%.

Regards Jason.

 

[mitta]

currently .06%

but I don't think it means very much because we found it very difficult to borrow any more from the banks last time round.

Mark

 

[Toni]

1.158% (excl. ppor)

Toni

 

[jaycee]

Interest $17,000.00
minus Rent $15,000.00
$2,000.00

IP value $385,000.00

$2000/$35000 = 0.52%

 

[Pushka]

Depreciation on our new IP makes it almost positive whereas excluding it here makes it around 4%!

 

[stumunro]

whoops i voted 3% instead of 1.5%
sorry

 

[Dazz]

0.6%.....can't afford anymore without getting a second job......and where's the fun in that ??

 

[joeExpat]

Shouldn't there be an option for those with a +ve ratio ? There must be a few out there.

 

[sash]

Positively geared.....to the tune of 1.8% of the portfolio...without depreciation....around 2.0% if depreciation is included.

Looking forward to bring it down to a more manageable 0.5% positive cashflow due...

 

[GIDDO]

JIT, maybe I am bit slow. What does this actually measure or indicate?

I started a thread a few days ago on which this poll was based.

At the time I started the thread I was day dreaming about what my IPs were costing me per year and thinking about the chance of some capital gain over the next few years.(or not)

Being of humble analytical skills, I was thinking of a nice simple measure that I could use to help me make sense of my investments and their prospects over the medium term.
In my own case I have about $1.5m in IPs, and they cost around $15,000 per year after tax, deprec etc. (I use PIA to analyse)

So when I have a tough day at work, I can dream about a 5% increase in IP values, $75,000 for me. Pay the $15,000 and I am $60,000 ahead.

If 2009 is ordinary and values go up 1% for my IPs then I am even.

If IPs lose 10% of their value in 2009, I find I am happy to hang on, pay the $15,000 per year and trust that the values will rise asap and save me.

I have a modest personal income so it is important to me that my annual loss is not too great. I can handle $15000 indefinitely.

Ramble finished.