Aaron and Michelle: The Yin and Yang of Property

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Picture this if you will: A modern workplace where a professional human resources manager is given the task of restoring peace and balance in a hectic sales environment, where some of her charges are known for shooting straight from the hip. Such was the case for Michelle Arundel, who was running HR for a company in Melbourne, when she came across Aaron Hooper, a fast-talking New Zealander, who had landed a job as a senior sales account executive.

“We did the taboo thing,” says Aaron. “We met through an employer that we both worked for. She was actually my HR manager.”

Now, more than four years later, the couple utilise both their natural skills sets in making solid property investment choices.

“HR is the more touchy-feely, Kumbaya sort of stuff,” says Aaron. “I’m more of the sales, in your face, facts and figures type.”

While you can almost hear Michelle’s eyes rolling as Aaron says this, the statement sums up a formula that has so far worked quite well for the pair. Aaron thrives on the numbers and returns for his investment, while Michelle focuses on buying properties that tenants will want to live in.

Maintaining two portfolios

Michelle already boasts two investment properties in her portfolio, while Aaron picked up his first one late in 2011.

Michelle’s portfolio

Location

Type

Purchased

Price

Current value

Weekly rent

Current yield

Balaclava, Vic

Two-bed unit

2007

$400,000

$525,000

$395

4%

Coorparoo, Qld

Two-bed unit

2011

$355,000

$355,000

$375

5.5%

After returning from a five-year stint in London in 2007, Michelle decided the time had come to begin investing in her future. She purchased a two-bedroom apartment in Balaclava, which is located in Melbourne’s south-east and backs onto the trendy suburb of St Kilda.

“I liked the area,” Michelle explains. “It is a great location, close to the city, 10 minutes from transport and walking distance to the beach. It’s also close to Chapel St and is part of the action, so has all the requirements for a good rental.”

After buying for $400,000 and living in it for a couple of years, Michelle leased it out. The property now brings in $395 a week in rent, which would equal a 4% yield for a new buyer, but is 5% on the original price Michelle paid.

Michelle’s next move came in the second half of 2011, this time in the south-east Brisbane suburb of Coorparoo. She and Aaron had spent a couple of years renting in Sydney, but she decided to look further north for her next investment.

“I have some friends up in Brisbane and they spoke highly of current infrastructure projects and the area in general,” Michelle says. “I gave my buyer’s agent Cate Bakos a list of five areas I was interested in and she did the research and calculated yield and future projections. We both settled on Coorparoo.”

Michelle was able to buy for a great price of $355,000 and lease out the property for $375 a week, which equals a yield of 5.5%.

Aaron’s portfolio

Location

Type

Purchased

Price

Current value

Weekly rent

Current yield

Hawthorn East, Vic

Two-bed unit

2011

$410,000

$441,000

$355

4%

Aaron bought his first property in September, 2011 in a bid to diversify his investment portfolio.

“I am more invested in the share market, but had wanted to get into property at some point,” Aaron says. “I have been saving a deposit for six or seven years and wouldn’t have gone through with it if Michelle hadn’t pushed me.”

Aaron purchased a two-bed unit in Hawthorn East for $410,000, which he believes he was able to snap up for below value. He trusted his buyer’s agent with the numbers and kept emotion firmly out of the buy.

“It’s supposed to be an unemotional investment,” Aaron says. “To put it in context, I’ve now been back living in Victoria for four months and still haven’t even seen the property.”

A recent valuation of $441,000 suggests Aaron bought well. His weekly rental income is $355, which is a yield of 4% on the current value and 4.5% on Aaron’s purchase price.

On the horizon

Aaron and Michelle are now renting in Port Melbourne, balancing their busy work schedules with their future property plans.

“We will either look at another investment property or a place of residence,” says Aaron. “The banks are willing to give us more money, so we’ll be doing one or the other within 12 months.”

Michelle says that renting where you want to live and buying in other areas is the most affordable option, but a permanent place would be nice too.

“We’re tossing our current strategy up against the great Australian dream of living in your own house,” she says. 

Hear from other real-life investors like Aaron and Michelle in our investor blog section

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