Positive gearing

Positive gearing is the opposite of negative gearing - the rental income from the property is greater than the total deductible expenses, so the property produces a net cash surplus. That surplus is added to your taxable income for the year and you pay tax on it at your marginal rate. Positively geared properties are easier to hold long-term because they fund themselves, but they're harder to find in AU's high-priced capital cities. Regional and high-yield markets (think mining towns, NDIS housing, dual-occupancy) are where investors typically chase positive cashflow.