I have a friend named Frank. He's a bit of a bogan, but he talks a lot about property investing. I suspect he does this to compensate for his bogan image.
Frank was talking to me and my friends before about how borrowing to buy investment properties is a good idea because if the rental income from the property is less than the interest repayments, you can negatively gear and claim as a loss to reduce taxes paid.
Many of my friends were impressed with Frank when he said this, but why would anyone do this? If you want want to reduce your taxes and have a good long-term investment, why not simply salary sacrifice into your super fund? By salary sacrificing into your super fund you can reduce your income tax to 15 per cent and put it into a long-term investment. Plus you bypass debt and money in super incurs lower fees than money in an investment property (e.g. lawyers fees, real estate agent fees, stamp duty, etc).
So wouldn't super salary sacrificing be a lot cheaper and simpler than negatively gearing an investment property, or am I missing out on something?