Hey everyone. I want to get your views on mining towns. I have found a unit . Total incomings $13520, total outgoings $9482. According to sources there was 33% growth in this town last year. I have checked up on the town and the mine is going to be around for a long while.
So 1. What are peoples views on mining towns?
and 2. What else are there in outgoings? I have included loan repayments, rates, water, and strata levies.
Matt R (Gold Coast)
1. The stability of mining towns can often flap in the wind, and are also known to sometimes blow away for ever. However, mining towns can provide great cashflow and properties in theses towns have been utilised to create some serious profits for people. Your research must be thorough, some towns are good, some are best left alone.
2. Council rates, property management, maintenance among others. It’s always best to overestimate expenses, underestimate income and if the figures still look good, well might as well have a go.
Good Luck…G7
Hi Matt,
he great things about property investment is the high leverage that is available. However, this does not always extend to small mining towns, you should check with a lender or broker to make sure that you can obtain a loan for such a property.
Regards
AlistairI do not like country towns myself. Some people have made good capital growth (eg 100% over the past year) and good cashflow as well. However, good growth in recent years may mean no growth for many years to come.
Terryw
Discover Home Loans
Mortgage Broker
North Sydney
[email protected]Terryw | Structuring Lawyers Pty Ltd / Loan Structuring Pty Ltd
http://www.Structuring.com.au
Email MeLawyer, Mortgage Broker and Tax Advisor (Sydney based but advising Aust wide) http://www.Structuring.com.au
Hi Matt,
As an owner of a good, solid, +ve cf property in a small mining town my advice to you would be to tread carefully. Knowing what I know today I probably would not have bought this particular ip given the low prospects of growth and uncertainty about the longevity of the towns main source of employment. Mind you I don’t totally regret this investment as it was a good start to building my portfolio. I’m buying another ip soon and will not be purchasing in the same area for above reasons.
Eric.
I totally agree with you about the risk of the down dying etc.. But it just seems so hard to achieve quality yields if you don’t go near these towns.
Matt R (Gold Coast)
Matt,
You can probably get similar returns from quality property in NZ, I’d sggest that market as a better one than mining towns.
Regards
Alistair
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