Home' API Magazine : July 2014 Contents area,” Mina says. “We invest in areas with
growth drivers such as public transport
and education centres, and low vacancy
rates to ensure steady income.”
Port Macquarie certainly has a lot
of growth to come, she believes, with
the population rising and plenty of
development taking place.
Their Port Macquarie purchase was a
block of four units they paid $425,000 for
earlier this year, and with rent of $735
per week this asset is well and truly
The couple is currently renting the
home they live in and have recently
purchased a fourth property, despite
having a broad goal of purchasing a
property every two years.
This latest purchase was a two-year-old
block of three units at Labrador on the
Gold Coast, which Scott describes as
their best investment to date. It rents for
$980 per week, which is an incredible 11
per cent rental yield.
“I have spent a fair amount of time
on the Gold Coast and I believe the
Labrador/Southport area looks like a safe
investment due to low prices and large
amounts of capital being spent in the
area – for example the Gold Coast light
rail project,” Scott says.
“Labrador also has relatively low
vacancy rates, which should result in our
units being rented out consistently.”
Purchasing in Queensland will also
enable the couple to avoid paying land
tax in New South Wales.
While Scott and Mina are working
towards achieving a passive income
from property, they note they won’t
necessarily ‘retire’ when they reach
it; rather they just want to have the
option of not working at that time if they
The couple insists that being property
investors hasn’t hampered their lifestyle
in any way – in fact, it has perhaps
enhanced it. The income from their
positively geared portfolio, as well as
the salaries from their jobs (more than
$200,000 combined) enables these
20-somethings to go on an overseas trip
every year, as many young non-investors
would do as well.
It hasn’t all been smooth sailing for
the pair, with Scott noting they had the
“tenant from hell” who stopped paying
rent and refused to leave.
“This taught us the importance
of properly following up on tenancy
applications rather than rushing someone
in just to avoid losing a week’s rent,”
Scott says. API
He worked up to five days a week after
school, and while at university, to save a
big enough deposit so he was “ready to
go” as soon as the banks would lend him
the money to buy his first property.
“I wanted to get into property as early as
possible as I knew the benefits of holding
assets over long periods of time,” he says.
“I thought about going halves in a house
with a friend when I was 18, but then I
realised the banks wouldn’t look at us
without full-time jobs so I forgot about it
for a few years, but as soon as I started
full-time work I worked out what the bank
would let me borrow.
“Initially I looked for a two-bedroom
unit but then I found an older-style
duplex which produced an exceptional
return, and despite my initial hesitations
in making such a large commitment
this was one of the best decisions I’ve
ever made. From day one it provided a
net income of $250 per week and has
now produced over $200,000 in equity,
allowing me to invest further.”
Scott received the First Home Owner
Grant for that property, in Sydney’s
Sutherland, and he and Mina lived there
for some time in order to satisfy the
requirements of the grant.
During this time they did some
aesthetic renovations, helping to increase
the rent to $800 per week. Mina was then
ready to purchase her own investment
property. After deciding to purchase
together, the pair bought a rundown
apartment in Maroubra close to the
central part of town.
They paid $620,000 for the unit, which
Mina notes was unique for the area in
that it had its own entry and a large
courtyard, and lived in it for a short time
while they undertook a renovation.
The unit has now risen in value by at
least $100,000 in just two years – after
only a $20,000 renovation – and is rented
for $650 per week.
While Scott and Mina have been
particular about the types of properties
they’ve chosen, carefully purchasing
what they deem to be good investments,
the recent lift in Sydney’s market has
also contributed to the success of their
portfolio so far, helping to increase their
overall equity position.
The couple is meticulous about
investing in areas they know, hence why
they initially bought in Sydney, where
they grew up, and subsequently in Port
Macquarie, where they have now moved
“We would never purchase a property
unless we were an expert on the local
Twenty-somethings Scott O’Neill
and Mina Hatzimihail are around
one-quarter of the way to their goal
of having a property portfolio producing
$200,000 in passive income per year.
The engaged couple estimate they’ll
need $11 million-worth of real estate to
achieve that level of income, and with a
portfolio currently valued at nearly $2.275
million they’re certainly on the right path.
They have three properties firmly under
their belt already, with a fourth under
contract at the time of writing, and their
portfolio will have $325,000 in equity due
to a large increase in collective value and
a loan-to-value ratio of 80 per cent.
Perhaps more importantly these
properties will return a total of $3190 in
weekly rent when their latest purchase
settles – or $165,880 per year – putting
Scott and Mina well and truly ahead at
the end of the day, with an income from
their properties of $55,000 to $60,000
Scott says it’s the high return they’re
getting for their properties that’s enabled
the couple to grow their property portfolio
so far, and to continue growing it.
“Our strategy is to accumulate a
positively geared, diverse property
portfolio, which also has the potential to
benefit from capital growth,” he asserts.
“Our properties were all pretty much
positively geared from the start, and we
only buy positively geared properties – at
this stage I wouldn’t consider buying a
negatively geared property.”
While some might say it’s hard to find
positively geared properties, especially
around Sydney where two of the couple’s
properties are, Scott says if you look
hard enough you can find homes with
impressive yields and the potential for
healthy capital growth.
“Don’t sit on your hands and wait for
the perfect opportunity to find you,” he
advises other investors.
“Spend hours looking for what you want,
learn about areas outside the bubble
you live in, and even when the media is
spruiking doom and gloom there’s always
opportunity if you know where to look.
Our tactic is to purchase properties with
more than one income, and don’t pay
anything extra for a ‘nice looking’ place.”
Scott, 27, and Mina, 26, have both been
encouraged into property investing by
their parents, who are also investors.
Scott made his first purchase four years
ago at a time when he says there was
“little confidence in the property market”.
API JULY 2014
JULY 2014 API
SCOTT O’NEILL AND MINA HATZIMIHAIL \\ YOUNG GUNS
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