I generally use the rent received versus investment cost as my guide to what the bottom line is. For example if the IP is going to cost me $200 per week (mortgage interest + the various ongoing fees) and the rent is $200 per week we have a winner. Not being a very experienced investor though I have ended up with IP's that are slightly negatively geared (by about $20 per week for instance). My question is about the effect of deposit on the bottom line. I have bought my IP's with no deposit. Obviously if I had bought them with a 10% deposit my bottom line could be said to be better, since that would make them slightly positively geared rather than slightly negatively geared. I thought it would be better in the long run to borrow the full amount, put up with negative gearing for a while, and wait for the day when rent goes up a bit and I get to a positively geared situation.
What are your views on the use of deposits for IP'S?
What are your views on the use of deposits for IP'S?