Club Property

Income

Because investment properties are rented out, they produce an income. This income will pay same of the costs of owning the property. Thus it is much easier to own an investment property – and pay the gearing expenses of such a valuable asset – than it is to own many other sorts of growth investments.

A Growth Investment

Gearing should only ever be done into a growth investment. Anything else does not make sound financial sense, or offers the sort of financial risks no responsible financial planner would ever recommend to their client.

If an investor is not investing into a growth investment, then they are probably invested into an income investment. However gearing means they will be paying interest even as they are earning it. The amount of money they are earning will not be sufficient to justify the individual taking on the risks associated with gearing.

Certainly gearing into a growth asset is the only way to achieve the goals of many individuals.

The two growth assets available to clients are property or shares. However typically the level of gearing required by an individual – given their timeframe and the amount of money they can comfortably invest – means that gearing into property is the only real option to achieve the relevant goals.