investors set to dump properties

A staggering 70% of landlords claim a rental loss in Australia (according to ATO figures - see link below). Consistently running a loss making investment is not sustainable. But this figure shows that most Australian housing investors have relied solely on capital gains for their property investment returns. Over the last decade this resulted in further leveraged property investment using negative gearing to off-set tax losses for the sole benefit of capital gains (as promoted by numerous property spruikers over recent years).

But when these investors start to realize that the current housing market shows little potential for future capital gains, many will decide to sell their investment properties and re-invest elsewhere (a high % of these investors are baby boomer's planning for retirement so they'll prefer cash or other liquid assets on call with a guaranteed return).

See link below for more;

The whole mucky scheme involves going ever further into debt. The greater the debt the bigger the tax deduction. Just ask 70% of Australia's 1.7 million landlords how it all works. They'll tell you...

"It's all tax deductible mate..."

http://www.moneymorning.com.au/20100818/how-70-of-property-investors-lose-money.html