Positive Gearing

Definition

Positive gearing means the rental income from an investment property exceeds all associated expenses, including mortgage repayments, management fees, insurance, and maintenance costs. The property generates a net cash surplus for the owner.

Why It Matters for Property Investors

Positively geared properties provide immediate cash flow, which is appealing for investors seeking passive income or those with lower risk tolerance. These properties are more commonly found in regional areas or suburbs with higher rental yields. While they generate income from day one, they may offer slower capital growth compared to negatively geared properties in premium locations.