Only the strong survive

On an April morning in 2003, in the genteel suburb of Annandale in Sydney’s inner west, a furious bidding war broke out.

Twenty people were crammed into the living room for the auction, all out to make the property their own. Carmella Rowsthorne looked on from the back of the room as the auctioneer struggled to keep up with the bids in that “frenzied few minutes”.

“Bids were coming in thick and fast,” Carmella recalls. “Towards what proved to be the ¬final stages, there were three key investors who were pushing the price up by $20,000 at a time.” Carmella says she had always liked Annandale’s wide streets and well-preserved period houses.

Prior to the auction, she consulted her broker and worked out that the investment was feasible if she could rent out the property for about $500 a week. With her broker’s backing in mind, Carmella took a deep breath and made her bid.

“I got the property, for $510,000,” she says. “I had to really hold my nerve, because this figure was at the limit of my borrowing power.”

Although she didn’t know it at the time, this property would prove to be a life-changing investment.

After a substantial renovation, Carmella sold the investment for $1,280,000 a few years later.

However, to fully understand the magnitude of her achievements, we must go back even further, for she didn’t ¬ find property investment – property investment found her.

You never know how strong you are until being strong is your only choice

Down but not out

Carmella and her husband were married for 15 years and developed a number of properties during their time together.

Her husband made the executive decisions when it came to what property to buy and where.

“That was the way it worked,” she says. “I felt content raising our family and pursuing a career in media sales.”

However, this stable family life was turned upside down when they divorced in 2001. Representing herself in the Family Law Court, Carmella came away with a $150,000 settlement.

Despite feeling vulnerable after walking away from a long marriage, she says the necessity of -finding herself a place to live spurred her into action.

“You never know how strong you are until being strong is your only choice,” she says.

Carmella decided to quit renting and to buy a home. She says, “My income wasn’t enough for the rental payments. I felt like I was regaining control over my life by purchasing a property.”

Drawn to the inner-west suburb of Petersham – it was cheap and close to work – online research led her to a run-down, two-bedroom strata unit.

“I managed to buy the property for $341,000 and still had $40,000 to use for a renovation,” she says.

After remodelling the kitchen and bathroom, installing ¬floorboards, and a cosmetic overhaul, Carmella had the property revalued at $485,000.

The success of the renovation compelled her to re-establish her financial goals.

“I learnt I could make a pro t from an investment if I paid attention to my budget,” she says. “I also got a real buzz from the renovation process!”

Carmella then bought a unit in Gosford on the NSW Central Coast, renting it out prior to purchasing her Annandale property in 2003.

Despite buying numerous properties since this time, the Annandale house still stands as her keystone investment.

However, savvy investors will know that a capital gain of $550,000 does not come easily. It would cost her $220,000, a showdown with a plasterer and a lot of hard work. 

At all costs

To finance her Annandale purchase, Carmella was forced to sell her Petersham property and move back into rented accommodation.

“In some ways, it felt like I was taking one step forward and two steps back,” she explains. “However, I knew it was a sacrifice I had to make.”

After having her investment surveyed, Carmella consulted an architect who suggested a drastic overhaul of the layout. The strategy would essentially mean demolishing the house to the point where only the front wall remained intact.

“I went to a couple of architects before finding one whose vision for the property matched mine,” she says. “He suggested removing the entire first ­floor, rebuilding it and adding a first ­floor extension.”

Her experience with the Petersham property taught her she wanted greater control over the renovation process. She consulted a building company, who advised her to complete an owner-builder’s course, to ­obtain a development licence.

“The course only took one day to complete and enabled me to self-manage the project,” she says.

Despite the qualification, Carmella describes the Annandale renovation as the most challenging experience of her life. “And I thought getting a divorce was stressful!” she quips.

Nearly every day for several months, Carmella’s day began at 5.30am, before the first tradespeople arrived on site. She would discuss development objectives for the day with them before heading off to her job. After spending lunchtimes agreeing to quotes with subcontractors, she’d devote evenings to painting the walls of the property.

“There were times when I thought the renovation would never be completed,” she admits. “But when the going got tough, I thought back to what I’d been through to get to this point.”

The renovation was completed in 10 months, and while the capital gain she achieved from the investment was crucial to her portfolio’s expansion, Carmella took more from the experience than just money.

All of her communication skills were put to the test, particularly during one heated exchange with a subcontractor.

“A six-foot-six plasterer had only done half of the job and refused to continue unless I paid him more money,” she says. “I kept my cool and worked out a compromise.” 

Address  Purchased Property type Purchase price Estimated current value Rent Rental yield
Petersham, NSW Oct, 2001 2 bed, 1 bath Terrace (strata) bottom floor $341,000 Sold for $485,000    
West Gosford, NSW Apr, 2002 2 bed, 2 bath, unit $280,000 Sold for $292,000    
Annandale, NSW Apr, 2003 2 bed, 1 bath terrace  $510,000 Sold for $1,280,000    
Potts Point, NSW Oct, 2008 1 bed, 1 bath, unit $320,000 $590,000 $550p/w 8.21%
Dalby, Qld Oct, 2010 4 bed, 2 bath, house $371,000 $450,000 $420p/w 5.90%
Townsville, Qld Mar, 2012 2 bed, 2 bath, unit $359,000 $450,000 $400p/w 5.63%
Gladstone, Qld Aug, 2012 3 bed, 2 bath, duplex $480,000 $500,000 $450p/w 4.68%
Derby, WA Nov, 2013 4 bed, 2 bath, house $620,000 $750,000 $850p/w 7.12%
 Camperdown, NSW Jul, 2013 2 bed, 2 bath, unit $1,050,000 $1,300,000 PPOR N/A
Knuckley St, Darwin, NT Dec, 2014 1. bed, 1 bath unit $370,000 $370,000 $750p/w 10%

Most of all, the project taught her patience. And patient she was – Carmella waited five years before making her next purchase in 2008.

The break allowed her to consolidate her finances and carefully consider her next move. She also used this time to meet like-minded investors.

“I had been going it alone for some time ... but felt that something was missing,” she says.

Carmella discovered a women’s support network that meets once a month to share their investment ideas.

Now the group’s administrator, Carmella says her involvement has been life-changing.

She says the diversity of the network, whose 21 members are “from all walks of life”, is important to its success, as it enables the exchange of a wide range of skills. Carmella’s experience in sales has not gone unnoticed.

“When I begin negotiating with a seller, I often say, ‘Well, you know I’m not going to pay that,’” she says. “One woman at the group says she’s been practising this phrase in the mirror!”

The members are able to learn and bene­ t from each other’s experiences.

“Odds are you will ­find someone who has made a similar investment to the one you’re pursuing. We’re also able to share contacts for reliable tradespeople and property experts.”

Picking up the slack

Since buying her Petersham property in 2003, Carmella has made nine further investments. However, not all of them have achieved the kind of success she would have liked. While most of her city investments have brought lucrative returns, her initial regional transactions underperformed.

“I made the mistake of thinking that property investment was easy after renovating the house in Petersham,” she says.

A six-foot-six plasterer had only done half of the job and refused to continue unless I paid him more money


After seeing an ad about portfolio expansion through an equity release scheme, Carmella contacted a property investment group. They advised her to use an equity release to buy a unit in a city location, but she decided to buy one in Gosford.

“I decided that a two-bedroom unit in Gosford would be better than a one-bedroom unit in Sydney, because it gave me more options when it came to tenants.”

Carmella’s decision would prove costly. In the eight years she owned it, the unit’s value only increased by $12,000, coupled with very small rental growth.

“It only became neutrally geared two years before I sold it,” she says.

Carmella now advises investors looking at regional markets to consider the location ­first and property second.

“Your purchase decision has to be right on-the-money when it comes to regional markets,” she says.

“Regional markets that experience capital growth invariably have an active local government, low unemployment, solid infrastructure and approved development projects.”

In 2010, she invested in a larger regional property. The house, in Dalby, Queensland, contained four bedrooms, two bathrooms and cost $371,000.

“I bought a house and land package, because a property investment company was selling them at a discount. “I was also attracted to the Dalby market because the mining boom was still very strong in 2010.”

However, things went from bad to worse as soon as Carmella signed the deeds. While she purchased the house through the company, she ended up having to deal with the builder herself.

“No-one was appointed to oversee the development process – so I learnt a lesson there,” she says.

Although the property brings Carmella a healthy rental yield of 8.2‑per cent, house prices in the town have dropped dramatically since the mining downturn. However, she is optimistic enough about the region’s future to retain her investment.

“The only reason I am able to do this is because I have diversi­fied my portfolio with both regional and city-based properties,” she says.

Carmella argues that volatile regional investments can be supported by city markets, which are often more steady in terms of house price growth.

After Dalby, Carmella added three further regional and two city properties to her portfolio. Her latest purchase is a one-bedroom apartment in Darwin’s CBD, which she bought “for a corporate lease opportunity”.

“I like Darwin because, unlike most other cities, its rental yield growth has been as strong as its capital growth.”

Don’t act your age

Carmella has come a long way since emerging from a divorce and renovating her ­ rst property in 2001. She says she never expected to be in her current position.

“I bought my ­first house for ­financial security, but soon realised that I could make property investment a long-term way of life.”

Although Carmella began investing at a later time than most, she believes that age should not deter others from building a property portfolio.

“At 59 years old, some people tell me to forget about property investment,” she says. “I tell them that I’m just getting started!”

Carmella continues to work in media sales, but no longer relies on her job for an income.

“I learnt that I could earn more from‑a single property transaction than I could from doing my day job for‑an entire year.”

Currently studying to become a buyer’s agent, she hopes to direct others towards successful property‑investments.

“I want to show people that you don’t have to be rich to get involved with property investment. It’s all about directing the money you have to the right place.”

Though Carmella’s story might appear to be one of solo determination, she insists that surrounding herself with like-minded people has been the key to her investment success.

“Getting involved with the women’s property network was just as important as my Annandale purchase. It’s all about sharing information.”

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