Negative gearing means your property's income does not cover its costs after interest and expenses, creating a tax-deductible loss that can reduce taxable income elsewhere. Positive cashflow means the property puts money in your pocket before tax, though tax outcomes still depend on your full position.

Neither approach is universally better. Negative gearing may suit higher-income earners with strong equity buffers who are targeting long-term capital growth. Positive cashflow can suit investors who need rental income to service borrowing or who want lower sensitivity to rate rises.

In Australia, franking, land tax, and state-based charges can change the after-tax picture quickly. Model scenarios with realistic maintenance, management fees, insurance, and vacancy—not just principal and interest.

Speak to a qualified tax adviser before structuring purchases; rules change and personal circumstances vary.