Investor In Focus Carolyn Parrella

Finding the housing market out of reach on a single wage and with house prices on the rise, Carolyn Parrella turned to rentvesting to rebuild a secure asset base after her divorce. It was a big turnaround for the mother of two, who’d purchased her first home as an owner-occupier at the age of 20 and invested in property with her former husband. Starting again on her own with dependents under her care would take a different approach.

“It took two years to have the courage to do it by myself,” Carolyn says.

She bought a fully-furnished two bedroom unit for $245k, complete with existing tenant. A relatively straightforward proposition, the only challenge for Carolyn was navigating her way through the conflicting advice she’d been given by lenders. In the end, she chose to go through a mortgage broker who was more able to present the best option for her situation - minus the technical jargon.

Carolyn had initially hoped the unit would be the direct launching pad into her own home but when her new partner, Rino, demonstrated the value of rentvesting she became a convert.

“It took a while to get my head around it,” Carolyn says.

The money the couple save by not maintaining their own home has since gone into two further investments: an inner-city Adelaide apartment and a coastal home at Sellick’s Beach. They rent in Rosslyn Park - an area that would have been out of reach as owner-occupiers - and Carolyn says they’ve so far been blessed with their own great landlords. “We haven’t had any downsides.”

Rented out to medical students for five years, the Adelaide apartment has recently been listed on the short-stay market through AirBnB. They’ve now had a lot of people through the property, who have all been very happy with their experiences.

“It’s gone fantastically well,” Carolyn says.

Acknowledging they could probably do more to leverage their rental income, Carolyn is comfortable to leave it at a reasonable rate and offer good value instead. Close by to her work, she’s currently self-managing but would consider bringing in a third party down the track.

By paying extra into the mortgage of her first unit - and a small refurbishment early on that increased the rental return - she was able to own it outright after eight years. The rent it now brings in provides a good income, with equity and capital growth that give the couple options for the future.

“The property at Sellick’s will eventually be a home for us, a bit of a sea change for the future,” Carolyn says.

Aiming to keep the inner-city apartment on the short-stay market, they’ll be able to access it for personal use and have the best of both worlds. They have no immediate plans to add to their portfolio, but in the meantime plan to pay as much debt down as possible.

For new investors, Carolyn recommends maintaining a financial buffer to protect against unforeseen expenses and periods between tenancies. Finding a trustworthy property manager who knows the area is essential, as is someone who treats tenants as well as they do landlords.

“It’s really important to me that tenants are recognised and respected,” she says.

Other elements Carolyn says are a must are being aware of how much stamp duty can cost when you buy a property and having sufficient insurance. In a very different position to the one in which she started out, Carolyn now finds herself in a position of choice.

“You can rent and invest and be financially comfortable,” she says.