How Smart Investors Sustain a Heavily Negative-Geared Portfolio

But How Do You Maintain a heavily Negative-Geared Portfolio when you have 4-5 negative geared properties? – This is the question I get the most in my calls.

Here’s the simple way to look at it.
Let’s take a real example.

We have a client, holds several investment properties under certain structures, and the combined shortfall is about 50k a year.
That means after rent comes in and bills go out, they’re still negative 50k.

Most people assume you’re paying that from your salary.
You’re not.

The smarter approach

Instead of draining their after-tax income, they redrew 150k equity from one of the properties we acquired at 6% interest. That costs about 6k a year.

That borrowed amount covers:

– Their negative gearing gap
– Their lifestyle buffer
– Their holding costs

This keeps them in the game while your assets do the heavy lifting.

What happens over time?

Over five years:

– The portfolio grows from 2.5 million to 3.5 million in 5 years (Conservative assumption here, so far their portfolio grew 14.35% in the last 8 months)
– That’s a 1M uplift
– Rents increase, reducing the shortfall each year

Then they will refinance at the new value, if required.
At 3.5M, 80% of the loan gives them access to fresh equity. Now you must ask this: but how… that’s where structuring comes in.

They will draw 250k, pay back the original 150k loan plus interest, and top up their buffer for the next cycle.

They’ve held the portfolio without selling anything and without relying on your salary to plug the gap.

Why this works:

Refinancing isn’t taxable. You grow your wealth tax-efficiently while your loan structure absorbs the temporary negative cash flow.

The basic rule is simple:
Your growth must outpace your borrowing cost.
If your properties grow at 7-10% while your money averages 5% over the 5 years, the compounding works for you.

The part most people skip: Risk appetite
This isn’t a strategy for someone who panics at every shortfall. We thoroughly educated our clients at every single step. Holding assets is a long game, and part of that game is accepting controlled risk.

You take calculated risks now, so you don’t live with regret later.

Running from risk keeps you stuck.
Understanding it, planning for it, and managing it puts you ahead.

That’s how serious investors build portfolios that actually create wealth.

If you’re unsure how to structure your portfolio or want expert guidance tailored to your investment goals, get in touch with us today. At Ash Buyers Agency, the Best Buyers’ Agent in Sydney. We are here to help you build wealth with clarity and confidence. 📞 Phone: +61 434 111 200

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