*kewcumber " Its rare in the long run, that you are better off making a loss than a profit because you only pay tax on a proportion of your profit still leaving you with... money. "
Yes, exactly. There comes a point where you have to make a profit, ie where the level of income becomes enough for it worthwhile to start paying tax on a profit. With rented property, you can either elect to deduct a certain % every year for wear and tear or deduct actual items of loss. You can also deduct your mortgage payments from any profit. So unless you put down a huge deposit, you generally run at a loss in the first years anyway. Then of course you can re-mortgage, so as to free up capital for new projects, although this might mean on an existing rental that your mortgage payments again exceed your profits.
Obviously it depends on how you structure your business. There comes a point when running it as a company becomes more tax efficient. Not least because you might want a company vehicle and other company owned asseets.
In the long term it goes without saying that the aim is profit, but the aim is also wealth creation and to create wealth you have to invest and take risk.
Am I not right in saying that very few businesses, away from the property sector, make much profit, if any, in the early years, and in fact a lot of people make a lot of money from setting up businesses which have never made a profit but which are sold for a lot of money? ie the profit is in the intellectual property the business owns, or the other assets, or even in the competition it provides to other businesses in that sector?
Lawyers also study tax and accountancy. Not saying I'm that good at it!
tbh though I would have thought the average person would know this (about not making a profit for tax purposes in the early years sometimes) and that its a bit naive to make an issue out of it to beat someone with?