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Why Real Estate Expert Kieren Parata Says Negative Gearing Is the Worst Investment People Can Make

Tuesday, 11 June 2024 07:00 AM

PERTH, AUSTRALIA / ACCESSWIRE / June 11, 2024 / As the cost of living rises and many people are living week-to-week, buyer's agent Kieren Parata is taking a different approach to guide his clients towards wealth.

Known for scaling his real estate investments into a multi-million dollar property portfolio in less than two years - a success story born from working multiple jobs and pulling together every last dollar to purchase the first property - Kieren is sharing his proven wealth-building strategies with his clients at Parata Property, replicating rapid-growth results time and time again.

While traditional advice recommends the savings account or Superannuation as a reasonable spot to store spare cash, Kieren considers this method outdated. He encourages his clients to put their money to ‘work', investing in real estate opportunities that provide positive cash flow from day one.

Referencing Warren Buffet's bite of wisdom - "If you don't find a way to make money while you sleep, you will work until you die" - Kieren uses real estate as a vehicle to create cash flow and leverage appreciating value to rapidly grow an investment portfolio.

The Parata Property strategy involves five criteria for property selection, all of which must be met before a property is presented to a client. Kieren explains, "We go through an extremely strict vetting process to ensure the property will cash flow no matter what" - an uncompromising commandment that rejects any and all possibilities of negative gearing for his clients.

Kieren explains why.

The fallacy of negative gearing

As Kieren steers his clients away from negative gearing, he sheds light on the overwhelming downside to the investment strategy that has become the norm.

"Somehow people have been indoctrinated into thinking that if they invest in an asset, it is a good thing to lose money every month," says Kieren. "Are you hearing how insane that sounds?"

"We saw the effects of negative gearing over the past few years. Many investors lost everything they'd worked years for when the RBA delivered the most aggressive rate hikes in decades after it was pushed from a record low of 0.1 per cent to 4.35 per cent in the space of 13 months. This was the biggest increase to interest rates in the shortest period in 40 years - sending many scrambling to find thousands more to pay their mortgage."

Beyond interest rate hikes that lead the costs of holding a property to unexpectedly skyrocket, Kieren notes lifestyle factors that make negative gearing an unwise decision: "What happens if you lose your job? How do you afford to keep the property?"

He lists rising expenses as an obstacle to scaling your investment portfolio: "How can you scale and build your portfolio if it costs you $5k to $10k per month? I started in real estate because I wanted to change my standard of living. I did not want to be losing money every month."

Kieren is no stranger to the common objections he hears when sharing his "if it doesn't cash flow, say no" strategy.

"I understand why people are surprised, because for so long, we've been fed this idea of negative gearing being a good thing. I hear the same misconceptions repeated again and again. All these fallacies are fed to us by people who want to keep us settled and satisfied with middle-class standards of living, or the corner street broker who's only ever owned one property."

"People often say to me, negative gearing is great, because I get $3,000 back on my tax return. I always laugh and explain to them: it's still costing you money and you end up out of pocket. You've spent $12,000 over the year to hold the property that gives you $3,000 back at tax time. Do the math, you lost! They come back to me and say, well, when I sell the property in 30 years, I'll make a profit then. Okay, sure, but I didn't want to wait 30 years for my standard of living to change."

"I'm investing to create financial security," explains Kieren. "I play the real estate game because I want to sleep well at night and not worry about losing money or how I'm going to keep the lights on. I'm not interested in taking risks, and neither are my clients."

The number one rule of investing

Kieren's investment strategies may be strict, but his ethos is easy to understand: cash flow is king.

"I had a client ask me how I've never lost money on an investment," Kieren recalls. "It's because I'm not interested in speculating on the profitability of my deals. When investors lost decades of hard work due to interest rate increases, my property portfolio was unaffected, because from day one I have prioritised positive cash flow above all else. With positive cash flow, I know I can weather major shifts in the housing market and economic downturns. I can comfortably manage my properties and use the income to take care of my family."

"That's my number one rule of investing: I don't want to lose money."

Redefining real estate as a business

Kieren explains that most people don't look at real estate as a business - but they should. "People see properties as things to own and call assets, but they're actually liabilities that are hemorrhaging money. I look at every property like a business with a balance sheet, and I only want to see positive cash flow on that balance sheet."

"Think about someone buying a business, whether it's a café or a gym. On day one of their takeover, they hold a staff meeting to tell everyone: I want you to make sure we never make a monthly profit. I want this business to run at a loss and lose money every single month."

"I think that is the definition of insanity, and no doubt a terrible investment. Yet most people have been brainwashed into doing this with property," Kieren continues. "That's why we reject the concept of negative gearing. It's not logical to invest $500,000 in a business that will lose money every month, and that's essentially what negative gearing means."

Opportunities to look for

While Kieren accredits his rapid portfolio growth to the initial cash-flow positive investment, this doesn't mean it was a once-in-a-lifetime find. Through his vast real estate network, Parata Property gives clients access to the same exclusive off-market opportunities that enabled Kieren and his fiancé Mackenzie to build their wealth from square one.

"For us, the most rewarding part is sharing our strategies with our clients and helping them build their own real estate empires, the same way we did," says Kieren. "Our mission is to replicate the same success we've had for our clients. We're not closing the door behind us, and we don't want to be at the top alone. We want to bring everyone around us with us, because that's what brings us the greatest fulfillment: seeing our clients win and their lives change for the better."

Those interested in Parata Property services can connect with Kieren at or @paratapropertyau on Instagram.


For media inquiries, please contact:
Cassandra Emmerson
Brand Strategist for Parata Property
M: +61 405 232 285
E: [email protected]

SOURCE: Parata Property

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