What’s so good about the positive gear property? There are many good things about this type of property and in this article I am going to tell you why they are good.

They can generate your passive income

Positively oriented properties can earn you a passive income. This is because they generate more in revenue than they cost in expenses. In other words, the rent you receive is higher than the expenses you have to pay (for example, mortgage, maintenance, etc.). If you own enough of these properties, you can eventually quit your job and live off the income your properties provide.

If you invest in negatively oriented properties, then they WILL COST you money every month. You can then quit your job and live off the income from these properties because you need the income from your job just to maintain these properties.

Income increases over time

Rent almost always goes up over time, but one major expense, the mortgage payment, stays the same. This means that as the rent goes up, you make more money, but your expenses don’t go up much. Therefore, you can have more money in your pocket each month or you can pay off the home loan faster. This means that over time it becomes easier and easier to pay for the property.

There may be less risk

There can be less risk when you invest in positively oriented properties because you are earning income from day one. With negatively oriented properties, you lose money every month and have to sell for a profit if you want to make that money back. However, if the property does not increase in value, you can lose a lot of money.

With Cash Flow Positive Properties, you earn money from day one! This means that even if your property does not increase in value, you can still earn money through your rental income. So this can be less risky because there are two ways to earn money (rental income and capital gains) instead of just one.

The tenant buys your house for you

In properties with negative leverage you are paying the excess of your mortgage that does not cover the rent. So you are buying the house with your own money. When the property is cash flow positive, the people renting the property are paying ALL of their mortgage. This means that you buy a house but someone else pays for it. So someone is paying for you to own a home! There is nothing better than that.