Meet Carmella Rowsthorne
Meet this month’s Woman in Focus, Carmella Rowsthorne. Ten years ago, she lost the home of her dreams in a divorce settlement. However, this resilient woman was determined to get back on her feet again. With her divorce settlement of $150,000, she turned her life around with property investments. She currently owns four investment properties and has put deposits on three more properties in Queensland.
STARTING OVER WITH DETERMINATION
Like many women, Carmella’s life changed drastically when she suddenly found herself facing divorce. She lost the beautiful home she loved and helped build, moved to the city, and started a new job as a national advertising manager at an industry magazine. Carmella took the $150,000 cash settlement from her divorce and used it as a deposit on a $344,000 home in Crystal St. Petersham. Excited that she had full control of all the decision making, Carmella spent another $40,000 renovating the property. The investment paid off. In only six months, the property was worth $450,000.
“The house had good bones and I had done a bit of decorating in the past so I could see the potential. Then I heard on the radio an advertisement about using equity on your house to buy investment property and thought that sounded like a good idea. I could do something like that. I went to the bank and said, “How much will you loan me to buy an investment property?”
EDUCATING HERSELF ALONG THE WAY
Next, Carmella purchased a property in Gosford without doing any research; a decision she now regrets.
“I learned a big lesson and now I have a list of boxes to tick: population growth areas, demographics, salary and age of the area, industry developments, education, transport, and local plans for infrastructure. I also make sure the properties are in areas where the vacancies are low and the demand is there.”
Although the property didn’t turn out to be her best investment, she was able to use the $30,000 equity from the Gosford house along with equity from her first house for leverage. She purchased an older home in Annandale that required a complete renovation, for $510,000 at an auction. After completing a one-day course, she rebuilt the house as an owner-builder. Carmella spent $220,000 on renovations during a grueling 10-month period.
“it was stressful dealing with all the tradespeople. I would get up at 6:00 in the morning to get them started, work all day, then go back and check their work at night. You really have to be on-site yourself to make sure they do it right. I look back now and wonder how I did it, but it was achieved.”
The sacrifices were worthwhile. That property is now worth $1,250,000. After the renovations were finished, Carmella moved into her dream home which had been renovated to suit her own taste and lifestyle.
A CHANGE OF STRATEGY
After reading about a mining boom, Carmella decided to try purchasing property in a mining town in Queensland to diversify her holdings. However, her circumstances changed when her investment properties encountered different problems. The Queensland floods and cyclones delayed the mining projects causing Carmella to cover the shortfall. One property wasn’t creating cash flow and another had water issues in the block that caused rents to decrease.
A year ago, a financial planner looked at her stressful situation and advised Carmella to sell some of her properties in order to save her home in Annandale. (The Annandale property had a large mortgage). Carmella disagreed. After attending some property seminars and getting advice from an accountant that specialised in property investments, Carmella decided to move out and rent her Annandale home. By thinking outside the box, Carmella created enough cash flow to keep her other investment properties.
“I was out looking for cash flow properties and I had one right under my nose – my own home. The property now rents for $950 per week, covering my original mortgage of $500,000. Even though it was hard to leave the home I built to suit my own taste, I now rent a modern, chic apartment around the corner and have to say I really love the lifestyle, low maintenance, and facilities. I have a massive outdoor pool, a gym, and for the first time I have my car in a secure car space. My home is now a fully tax deductible investment and has created the positive cash flow to enable me to meet my mortgage payments and increase my borrowing capacity to purchase more properties.”
ADVANTAGES OF BEING ASSOCIATED WITH PROPERTY WOMEN
Carmella loves being associated with Property Women and having access to the education, resources, and connections that the organization provides.
“I have met so many like-minded people at events who have the same interest. It made me realise how many people, including close friends ‘just don’t get it’. But you can’t force your views on friends. The workshops are the perfect way to keep enthused, learn, and network with women in the same boat!”
THE FUTURE LOOKS BRIGHT
Carmella is happy she kept her property investments and didn’t listen to the financial planner who advised her to sell.
The mining projects were started in Queensland and rents went up $70 a week, the water problems on her other property are all fixed, and rents in the Gosford area have risen even though values have not.
“It took a good accountant to show me what I had built and what it will be worth in 10 years. That was the incentive to keep investing and made me realise that I had built a secure future for myself.”
“Now I have a great team around me, an accountant/financial planning firm specialising in property, a mortgage broker (who invests in property) and more recently a firm who researches growth areas in Australia plus like minded women as a support group.”
In five years, Carmella will have seven investment properties that will have increased in capital growth and have a super asset that is almost five times greater than if she had left it in a normal super fund.