Negatively gearing is commonly associated with property.A typical example is where an investor borrows to acquire the property meaning one of the most significant costs of holding the property are the financing costs.Where the total of the financing costs andother holding costs exceed the rental income, the investment property is negatively geared.
So why would you want to spend more than you earn? The answer should be that you expect the value of the property to increase over time at a rate greater than the accumulated losses from negative gearing.
