Views on negative gearing are poles apart. Negative gearing is like the death penalty. People feel strongly both ways about it, judging by reactions to my last column. In that column, I wrote that negative gearing — which occurs when a landlord makes year-by-year cash losses on a mortgaged property — is becoming more common. This is mainly because rents haven’t risen nearly as fast as house prices.
Q&As: Couple should spend less?; Wealth isn’t always money; How last week’s correspondent made his millions; Making extra payments on fixed mortgages without penalties.
Q&As: Man who has made $3 million from shares; How much risk for a 53-year-old?; How good is advice from banks?
Negative gearing may come back to haunt you. Many landlords say they don’t mind or even like to be negatively geared — making year-by-year cash losses on a mortgaged investment. But it never looked all that appealing to me. And recently I heard a rather compelling argument against it.
Q&As: 27-year-old overseas doesn’t need more than 4 rentals in NZ; Should more conservative 26-year-old get revolving credit mortgage?
Q&As: Shares v term deposits — it depends how much time you have; Short-of-cash millionaires should try to renegotiate their mortgage; When is a 2% penalty not 2%?
Readers rally to back houses. It always happens. Whenever I write about investing in houses and shares in the same column, people say I’m unfairly negative about houses. In my final column last year, I wrote that the rise in house prices over the previous year was slower than the rise in: New Zealand shares, hedged overseas shares and unhedged overseas shares, all including dividends. That surprised me, and I thought it might surprise you.
Q&As: Should man, 53, go with bank and seminar rental recommendation?; Young couple ponder buying share of family farm; Should Mary answer all readers’ letters?
Q&As: Should newly separated woman buy a house or rent?; Our total tax rate depends on whether we spend or save. Plus: End of year message.
Can you get rich quick?: Only by taking big risks. Also in this issue: From the Mailbox — Spending in retirement.