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India is also a country with ppl
japan and also all of south east asia, China is only part of the story, then you have american consumers; and 500mml chinese moving from third world to middle class citizens in the next few years.Buy well and at a discount, increase your yield and you'll do well in mining towns;
Moranbah though is way too expensive for me but prices won't drop off too much as theres not much land around it as its got mining leases all around it. if i was to buy in moranbah i'd only buy a house with enough land on the back to put a another house etc
most importantly you will need a fire wall to be built if one is not there, approx 10k if cavity roof
KevinR wrote:Hi All, Long time reader first time poster – What are the thoughts on collinsville? I have done a lot of research and most signs suggest large capital gains and increased rents are just around the corner? If anyone can assist with thoughts or research they have done it would be appreciated! This is my first foray into the property market and I would like it to be a positive experience! Thanks Kevinwhat do you base your prediction on?? I know there are three planned mines which will emply around 850ppl; Drake, Jax and Sarum coal projects
charmhaven
Catalyst wrote:So you bought a property that will lose money so you don't have to pay so much tax? I know lots of people do it. It's called negative gearing but it's not for me. I like making money.The more you pay off the less tax you claim as a tax offset, but the more you pay off the less interest you pay.
I'm hoping you are paying the extra money into an offset account and not directly off the loan. By having the offset account the extra money you pay is yours to withdraw as you see fit. Down the track you may want that money to buy another IP or even a home to live in. You can take the money from the offset without losing tax deductions. If you pull it out of the loan to by a home you lose the tax deductions.
Agree totally,
also you will find that if you owe 240k and getting $250 a week in rent you will probably only get back 3-4k from that property as its not far off been positive geared. with that in mind your property then becomes pretty much neutral so you don't really saving anything as it initially costs you money to hold, and this is what you want, neutral or positve geared!!
always remember though the more cashflow you have, the better your serviceability…
Mackay has the edge over Singleton although you should get good growth over the next 5 years at both towns
Check out Adani mining…..
proposing to build a new coal mine exporting 60mtpa (create new qld town west of Moranbah), railway and port at Mackayif your looking for capital growth over the next 2-3 years then i'll be staying away. you will get good yields though so really depends what your after. Nothing dramatic is going to happen on the cc for prices to rise
the whole area has been stagnant for a few years now. there is heaps of land and not enough demand. I just offloaded one of two properties up there which ive had for 4 years and put my money elsewhere!!
the only place which i would buy up there if i did now would be a cheap 2 bed unit in Gosford close to the train station and shops
have been looking at regional towns of muswellbrook, maitland and singleton. Just wondering which town would be the best to invest in for capital growth?
Also, I've been having trouble finding data on new mines that are existing and proposed in the area showing workforce etc, nsw planning website is terrible unlike qld's department of mines!!
Can anyone provide any links of maps showing where the mines and projects will be located? the ones from nsw planning are useless
Thanks
Portfolio PI wrote:HI Everyone,Nearing the end of the year it would be great to hear everyones experience with regional QLD and how your properties have performed!
Its great to see the rental yields throughout regional QLD raising, unfortunately there are still areas where the council / developers / banks are not being pro-active enough in working simultaneously to ease the pressure in some towns. Below is what myself and my clients have experienced as well as what I have observed in general.
Moranbah is seeing higher rents yet again! where will the ceiling be? with a lot more projects in the pipeline that will directly affect the town in the next 3-4 years, it would appear that not enough housing will be created to supply this demand. It is great to see some much higher density development in order to provide what would be considered as more affordable accommodation…well for Moranbah anyway. Rental yields at capital value are around the 14-15% at least. The ULDA (Urban Land Development Authority) are still in the process of providing more land in the hopefully near future as demand continues to sky rocket for this town of just 9000 people. The median sales price has nearly doubled in the last twelve months, however this is partly due to the median sales price in the September and October being $850,000, up from $630,000 in August. So before you go counting your capital gains by doubling it, make sure you have the facts first! nonetheless, great capital gains have been had here this year.
Mackay seems to be going up well, however with a lot more development to the west. New estates are becoming increasingly more popular in Walkerston, Mirani and Marian. Rental yields still come in around 6%+ at capital value. Land seems to be coming available on par with demand (relatively compared to other areas). Mackay really suffered during the GFC so it seems the abundance of land could have been soaked up this year. Now the land is coming into much smaller supply you should start to see some capital gains synonymous with other well performing mining towns.
Dysart has performed well, with capital gains of anywhere between 10-20% in reality and strong rental yields. There has been a lot of mining activity in the northern part of the Bowen Basin this year which has helped rental yields grow exponentially. Judging by realestate.com.au there are actually a few properties offering first weeks rent free, this is a little bit disturbing. To me this means either one of two things. 1. Rental demand has softened and investors don’t want a reduced yield in the long run. 2. Investors are trying to push rental yields a bit higher in preparation of selling within their next lease to make there property more attractive. I could be completely wrong here however I do get concerned when people are offering rental offers especially in such a buoyant area like regional QLD.
In Gladstone, the hub of the hype, the median land sales price has gone from $200,000 at the end of last year to $250,000 today. I like to use the land sales price for Gladstone as many of the sales there has been house and land packages. This seems to be synonymous with the end sales price as building costs have not risen a lot this year. This in turn equates to a 10%+ growth in the region. Rental yields unfurnished are sitting a little low at the moment for my liking. The 738 properties listed on realestate.com.au is a little bit high, however 200 of these are listed as under contract. Many for sale are off the plan units and house and land packages also.
Emerald has experienced capital growth of 10%+ whilst rental yields have increased from 7% at capital values to at least 8%. Furnished accommodation is achieving rental yields up to 10%. There are 20 properties available for rent currently, whilst 5 of them are asking at least 20% above market value, this creates 15 properties available for rent in a town of 17000 people. of those for rent, only 6 are available in the next 10 days. The mines in southern Galilee Basin have not even began construction so there is a lot more pressure to come to the Emerald Market. The new woolworths complex is well under way and will be completed in April. 200 new people are expected to be employed there alone and will require housing. The CHR Council are working as hard as they can to provide land releases, however the land coming available in the next 2 years will not fill the demand that is and will be present.
Apologies for the areas I have missed, I am looking forward to hearing other peoples experiences so far this year! Exciting times lay ahead for regional QLD property investors, the years to come are to be awaited with excitement of what i consider a once in a lifetime opportunity. I read an interesting article showing India’s population increase will go from 240 million people to 590 million people in the next twenty years. So if you are asking how this mining boom is different than anything in history, that’s just one reason!
Happy Investing everyone!
thanks for the info, very interesting.
What are your thoughts on Moura, Blackwater and Wandoan??Can Blackwater be the next Moranbah and Wandoan the next Blackwater??
Scott No Mates wrote:A seller would be more likely to agree to allow access for leasing but would not agree to a clause allowing settlement to be delayed indefinitely as you can't find a suitable tenant or one at a high rent.not true, it all depends on how good the agent is
1. subject to obtaining a lease agreement at $………. prior to settlement (settlement to be extended until obtaining lease agreement).
this clause is best used for commercial properties and properties in mining towns where the buyer is looking to secure a lease which also helps obtaining final finance approval.
any conditions can be negotiated into a contract as long as its specified as an 'annexure' in the contract of sale and initialled/signed by both parties.
It has worked with me every time ie; longer settlement, longer due diligence clauses extending the cooling off period, subject to finance approval, less than 10% deposit and securing a lease prior to settlement, etc, etc. everythings negotiable with the exception been buying at auctionmost agents will tell you that you can't place special conditions but as an investor you can negotiate anything. don't let agents fool you as they all want to lock in buyers with the standard 5 day cooling off period, 10% deposit. 99% of agents aren't investors and only sell properties as a day job
the towns i think that will gain the biggest upside will be whyalla as the desal plant will be built there and port augusta with the new port etc
.for me roxby downs is too risky as new housing will be built there to accomodate the new workers which means i don't think you will see returns high enough to justify buying there. the coastal towns are more secure as theres different industries in town and you can get yields over 7%its definately not cheap getting tradies to do work in the bowen
there is also talk of a new town been created for this project; there going to need around 4000 workers with export capacity of 60mil tonnes
nathsn8686 wrote:hi Josh,What are your thoughts on Clermont with the Adani mine being so close.
Also have you noticed any properties with cracking in the brickwork and gorund slab due to the proximity of blasting from the mines.
carmichael mine will be about 150km north of clermont
does anyone know if you have a property under a call option agreement/contract, say for 12 months, can you collect the rent (total or part of) for that period and whether income tax would be payable?
great blog, things in Mackay look promising indeed, and for me is more a stable city to invest in than Gladstone for the long term
hbbehrendorff wrote:The clock is broken !armagedon is coming!!!!!!!!!!!!!
lolupdate or washpool coal project near Blackwater;
japan and also all of south east asia, China is only part of the story, then you have american consumers; and 500mml chinese moving from third world to middle class citizens in the next few years.
