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GUEST OBSERVATION
As 2015 begins, many of us will undertake the annual ritual of enacting a new set of New Year resolutions.
Common resolutions (some kept, many broken) that are guaranteed to come up again in 2015 are spending more time with the family, volunteering, getting fit and reading more books. But what about increasing your wealth?
Improving one’s financial position is a common resolution and there are many different ways to go about this, such as investing in shares, property, bonds or funds.
Being a real estate agent, my area of expertise is of course, property. Here are some of the pros and cons of buying an investment property in the New Year.
One of the most obvious benefits of buying an investment property is earning rental income. Rental income can act as a significant supplement to your regular income, providing you with the financial means to improve your quality of life, save for the future, or even invest further.
While this increased income is a huge drawcard, it’s important to remember that owning an investment property can pose challenges too. Realistically, there will be times when a property is vacant, resulting in no rental income, even though you have to keep up with your repayments if you’ve taken out a loan.
While most tenants pose no issues, unfortunately, sometimes a property does get damaged or rent is paid late. The simplest and most effective way to manage vacancies and tenants is to hire a quality real estate agent to handle the property management on your behalf. It’s also better for your tenants as it allows them to easily access information and assistance seven days a week.
In addition to earning from rental income, by being strategic about the investment property you buy, you can also benefit from capital growth. To ensure you buy an investment property with the right profile to achieve strong capital gains, it pays to be thorough in your research, both of the individual property and the local area. It is also worth noting that many property expenses can be offset for tax benefits.
Equity markets can be volatile, making investing in property a safer and less unpredictable investment. Due to the relative stability offered by buying an investment property, it is becoming an increasingly popular investment for those with self-managed superfunds (SMSFs).
Holding property in a SMSF offers excellent tax benefits particularly in regards to capital gains tax. The recent revision of Australia’s super rules means that it’s now easier for Australians to invest in property using their superannuation.
By ensuring that you can effectively manage your property, whether that be personally or through a real estate agency, the potential rental income and capital growth of an investment property can prove incredibly financially rewarding, both in 2015 and the future.
Now, what were those other resolutions…?
Julian Augustini is director of<a href="https://www.hodges.com.au/" target="_blank"> Hodges Brighton</a>.
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JulianAugustini-CWBpkiJwAX

Acting on a New Year's resolution - buying an investment property

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GUEST OBSERVATION
Brighton is located on Port Phillip Bay 11 kilometres south of Melbourne’s CBD. One of Melbourne’s most exclusive suburbs, Brighton is home to a number of celebrities and prominent individuals.
Brighton’s demographic has traditionally consisted of middle-aged and older couples with children, along with older single residents. In more recent times, younger families have started populating the area. As of the 2011 census, Brighton had a population of just over 21,000.
The suburb offers a cosmopolitan lifestyle with a selection of attractive shopping precincts. Brighton’s main centre is situated along Church Street which houses supermarkets, an assortment of beauty salons, high-end fashion boutiques, a cinema and a shopping plaza. North Brighton’s historic Bay Street is another popular shopping strip boasting gourmet cafes, bars and restaurants, designer retail stores and gift shops.
Numerous upmarket hotels are scattered along Brighton’s famous Esplanade, which features a pedestrian and bicycle path lined with palm trees along its foreshore. Another area that’s popular among locals is Martin Street which contains a number of gourmet food stores.
Brighton is bordered by six kilometres of stunning coastline and is home to the iconic colourful bathing boxes at Dendy Street Beach. The area also boasts Middle Brighton’s Municipal Baths that were established in 1881 and are one of only a handful of remaining open water seas baths in Australia.
Brighton has a well-connected transport system with the Sandringham train line running through the suburb. Four stations; Gardenvale, North Brighton, Middle Brighton and Brighton Beach provide residents with quick and easy public transport links into Melbourne’s CBD. At the eastern extremities of the suburb, there is also a regular tram service into the city. Brighton is bordered by the Nepean Highway – an arterial route that offers direct access to the city and the Mornington Peninsula.
The area is popular among families with teenage children largely due to its exceptional schools that include; Brighton Grammar School, Brighton Secondary College, Firbank Girls’ Grammar School, Haileybury’s Castlefield Campus, St Leonard’s College, Xavier College’s Kostka Hall campus and Star of the Sea College.
With a median property price of $1.9 million for a house and $940,000 for a unit, Brighton is home to some of Melbourne's most luxurious properties. Almost half of the home owners in the suburb own their property outright. The types of property available in the area can be categorised as follows:
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<li>Large mansions boasting tennis courts and swimming pools. These can be found in the suburban streets as well as along the desirable Beach Road.</li>
<li>Large Victorian properties.</li>
<li>A good supply of Edwardian family homes and other period properties.</li>
<li>Recent years have seen an influx of modern townhouses.</li>
<li>In the past five to 10 years many new apartments have been built and a number of new developments are currently underway.</li>
</ul>
The majority of properties in the area are stand-alone houses, which make up over 60% of Brighton’s property types. Townhouse and unit housing account for 20% of the houses and the remaining 20% are apartment buildings. Renters make up almost a quarter of the market, so there is high demand for rental properties.
Property prices in Brighton have risen significantly in the past 10 years and as Brighton is a high demand market this is likely to continue. This strong demand has greatly affected the price and availability of property in the area. With an average of 43 people showing interest per property – almost double the state average - it pays to do your research and be selective when it comes to a property’s position, style and type.  
By getting a foothold on the property ladder in Brighton, you will more than likely be able to sit back and watch the value of your investment grow. 
Julian Augustini is director of <a href="https://www.hodges.com.au/brighton-real-estate" target="_blank">Hodges Real Estate Brighton</a>.
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Julian Augustini

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