Musician property investor hits high note with growing portfolio

Multi-talented 34-year-old Monica Rouvellas has achieved much academically and in a professional career spanning the Sydney Conservatorium of Music, a law degree and job as a solicitor, to owning her own tech start-up.

But for this ambitious polymath with so many choices at her dextrous violinist and pianist fingertips, it is property investing that she regards as her primary focus and the pathway to happiness, fulfilment and financial security.

Since buying her first property at 27, about which she adds, “I personally think I started my property journey a little late”, Ms Rouvellas has in the past couple of years added two more properties to her portfolio.

While this is a notable achievement in its own right for a relatively young investor, her medium-term goals are far loftier.

The practising Sydney solicitor will consider her target met when the gavel falls on her twentieth property by the time she reaches 40-years-of-age.

“My ultimate goal is to earn enough passive income to be able to have a comfortable lifestyle that includes the ability to choose to work or travel the world for months at a the time, so ideally, if I could earn $150,000 to $200,000 in passive income per year, that would allow me to live the life I’d like to lead.”

Her ambitious investment and financially-driven mindset was forged from a time when she was still mastering her times tables.

“My parents had multiple businesses when I was growing up and I saw the effects of the 1990s high interest rates and how that, plus trusting the wrong professionals when structuring their business and acquiring finance, had affected their businesses - it was a good lesson to learn at a very young age.”

Her parents made sacrifices for her to attend a good school her dedication to education has been just as committed as her ambitions towards property investment.

Ms Rouvellas started out as a classically trained violinist, composer and music producer, completing a Bachelor of Music with First Class Honours before working for a few years as a music and video producer while simultaneously running a music teaching studio on the side and, to round out her weighty workload, also completed an MBA at the University of Technology Sydney during that time.

Monica’s growing property portfolio

A company restructure led to her moving into an academic role at Macquarie Business School and this later expanded to several other universities, including Sydney University Business School and UNSW.

“I always wanted to study law, so I gained a Juris Doctor from UNSW, which allowed me to add working as a solicitor to my portfolio career of being both a music educator and university lecturer and tutor.

“It was during this time I realised that working a 9 to 5 full-time job was limiting in terms of both my career and earning potential, and I was wanting more.

“I got into property investment with the goal of building passive income so that I could continue working on my diversified career, where I had the choice to work or not and I could pick the type of work that appealed to me financially and intellectually.

“Using property as a passive income stream also allowed me to start up a tech business, Muzikboxx, and to be able to fully self-fund this business venture.”

Property was a small price to pay, financially and socially

Affordable properties have formed the basis of Ms Rouvellas’ three regional properties so far, with each priced at a very affordable level.

“If I knew in my early 20s what I know now, particularly around the importance of structuring your portfolio correctly, then I probably would have started investing in property when I finished high school and not spent my hard-earned wages on things like holidays, cars and discretionary spending.”

Saving for her first house deposit required minimal sacrifice, she said.  

“I still went out on weekends with friends and had a social life but I did have be very disciplined with how I saved my money.

“I set myself a weekly, monthly and yearly savings goal and also also set financial goals on how much I needed to earn to ensure I could hit my savings goals.

“I learned during this time different ways to enjoy life that didn’t break the bank, such as organising picnics at the local park with mates rather than paying for expensive meals at restaurants.

“When I had the deposit ready it was nerve racking, as I’d never had that much money sitting in my bank account before, and seeing my account basically go back to zero was a shock!”

Property portfolio strategy built on cash flow

Like most home owners and property investors, rising interest rates are at the forefront of Ms Rouvellas’ planning and strategising.

She’s been fortunate, or shrewd, enough to have bought in areas that have withstood the price declines seen elsewhere around the country.

Nowra units continue to increase in value, while houses have enjoyed strong capital growth over past few years and have only just begun to taper off. Bundaberg’s housing market continues to go from strength to strength, like much of regional Queensland that is currently in a growth cycle.

“I’m driven by rent yield and ROI (return on investment), particularly at the moment with the increasing interest rates, I am looking to ensure that my new purchases, like my existing properties, will be able to pay all expenses and return at least $5,000 if not more per year.

“One of my properties currently returns me $15,000 per annum after all expenses,” she said.

In choosing her properties, like so many property investors familiarity was an initial motivator but she is now setting her sights more broadly.

“For the first couple of properties I bought in areas that I knew well but I also considered factors like rental yield, potential growth, development potential and proximity to places and amenities that the typical renter would like to be close to.

“For my third property, in addition to these factors, I also expanded my use of data to try and generate immediate gains, enabling me to utilise the increase in equity to fund further purchases and future developments.”

Every investment journey presents obstacles

The conservative nature of banks when it comes to how they treat freelance, multi-source income clients was one of the two main obstacles Ms Rouvellas had to tackle in beginning her property investment journey.

“Banks are very traditional in the way they lend - they like customers who have 9 to 5 jobs, who have a regular steady income, and who they know will work to pay off a mortgage.

“Banks don’t like customers even if they can increase their income 10-fold through having a diversified portfolio career, and even though from a financial and accounting point of view it is arguably more secure, particularly during economic turbulent times such as the pandemic.”

The second lesson she said aspiring property investors should pay careful heed to is that structuring a property portfolio can make or break an investment plan.

Ms Rouvellas’ investments have so far delivered chart-topping results.

“I treat my portfolio as a business and structure it like a business using a combination of complex business structures that allow me to maximise my revenue but also take advantage of finance and tax benefits that are usually only available to businesses.”

She also chooses to rentvest, living in a rental property in inner Sydney.

She said she leaves the day-to-day aspects of the portfolio to property managers but schedules monthly catchup calls to make sure all maintenance and other issues are properly actioned.

“I often use my own tradies and deal with them directly, as this can be more time efficient and it allows me to have more control over the work that gets done to the properties.”

Asked if her plans to buy another five properties and to build a few developments on existing properties in the next couple of years was adversely affected by forecasts of national property price declines and an imminent ‘mortgage cliff’ facing many borrowers, Mr Rouvellas was unmoved.

“I’m fortunate to have bought in locations that have not had price drops and in fact are still increasing even with the higher rates and rents continue to rise.

“With that said, my focus will be more on ensuring that I have adequate cash flow on the near-future purchases but also the ability to develop on the land.”