Forum Replies Created
- fredo_4305 wrote:I started looking towards Toowoomba and just signed a contract on a place there. Will definately be looking to sell one property off to finance the build on the battle axe.
Hi Fredo,
might be a bit of a long shot but any chance of sharing the details on your Toowoomba purchase?
I’ve been having a look at Toowoomba lately with the strategy of buying a larger block for future subdivision.
Although I haven’t done a small development yet I’d certainly consider it further down the track.
I’d be interested in your experiences.
Jack
moxi10 wrote:On the subject of the Gallilee Basin development, obviously the fly in fly out option will be utilised by the mining companies, and will be a big influence on the prosperity and development or lack thereof on nearby centres. If I were employed on a mine site in the Gallilee Basin on a fly-in fly-out basis, I would prefer to fly right past Emerald on my way to the coast. However, I agree that Emerald is in a good position to benefit in many ways from the expansion of existing nearby mines, and the development of mining in the Gallilee Basin, especially as a regional provider of services, and no doubt as a base for miners and construction crews involved in the development.I’d probably agree with you there however, I’m sure we will see some movement into Emerald from Galilee Basin mining workers and their families. In relation to the coast and FIFO miners It’ll be interesting to see how Yeppoon fairs over the coming decade.
I know there has been talk from mining companies around Blackwater and Emerald to not encourage FIFO workers and instead house them in the community. Time will tell I guess.
Jack
Portfolio PI wrote:there is a lot of development happening within emerald currently, woolworths are spending $120m on the largest shopping centre for the town, Harvey norman have confirmed a site, bunnings still shopping etc.Do you have property there Jack?
Josh
Hi Josh,
Yes I do have property in Emerald and I’m seriously considering increasing my holding.
I think Emerald has a strong future considering the deep underlying fundamentals which ultimately derive from the huge demand for high quality coal, both hard coking and to a lesser extent thermal, by emerging nations such as China, India and other developing Asian countries.
I think these fundamentals are going to underpin our economy in the short to medium term, and perhaps further. Some of these towns in the Bowen Basin are going to be prosperous for those who understand what is about to occur.
Jack
Yes Josh I’d have to agree with you in relation to the Galilee Basin. Emerald should develop into a regional powerhouse supplying infrastructure out to those mining sites but also provide housing for some mining families that choose to live in the area.
Interesting to see what will happen further south in the ‘Golden Triangle’. I know there is some discontent amongst the farmers down that way in relation to what Bandana Energy is trying to implement and establish. I can certainly empathize with them. Although if the mining does go ahead I think it will again strengthen Emerald’s position as a regional centre.
Also agree on the 10% rise in yields. Happy days!
Jack
rusty05 wrote:Jack, I think I'll have to track down one of those "extremely knowledgeable and experienced brokers on this forum" you speak so highly of because they obviously know the game inside out.Thanks again.
No worries Rusty and happy to help out. Sounds like Terry gave you some good advice.
If you need any further assistance re: broker PM me and I’ll be happy to pass on the details.
Hope all goes well mate.
Jack
Hi Rusty,
sounds like you are in a good position. I would strongly recommend you speak with a mortgage broker who is also a successful investor themselves. They will be able to guide you on your journey. There are lenders that will consider 100% of rent from investment properties and again a good broker will source these lenders if required. Serviceability (Cashflow) is vital to keep you on the road, so to speak, so if you stick to your strategy with the guidance of a good team of experts you should be able to continue purchasing.
There are a couple of extremely knowledgeable and experienced brokers on this forum who also command sizable portfolios of their own. One of these has been of great assistance to me and will continue to do so in the future.
Hope this helps.
Jack
Portfolio PI wrote:moxi10 wrote:Rents in Blackwater are quite high already, you will see demand increase in Emerald more so as three of the largest coal mines in emerald plan to get into gear just 150km west of Emerald. I am an ex local to the area, am in the area every two weeks for my clients and have 15 IP’s in central Qld.If you need any more info feel free to PM me.
Josh
Future development in the Galilee Basin could potentially result in some big upside to not only the whole region but Emerald in particular. It’s going to be an interesting ride I’m sure. In relation to rental yields, Emerald is some ways behind Blackwater and certainly those towns further north such as Dysart and Moranbah. Any thoughts from the forum on just how rents could go in Emerald given the huge investment to the west?
Jack
Qlds007 wrote:Hi FreeHave a read of my article in the Oct 2010 API magazine and it will tell you a bit about how i started my journey.
If you want it in PDF format shoot me an email and i will send it over to you.
Just cant attach it here.
Cheers
Yours in Finance
Hey Richard,
got your article right here in front of me and it’s a cracker…had to read it again but it’s August 2010 API. I then noticed the date on your post above, the 16th of June 2011, and realised it was the day after the Origin 2 game when all Queenslanders should be forgiven for having the odd brain fart.
Inspirational story Richard and I’m glad your opening the batting on my team!
We’ll get you in game 3!
Jack
Tracey B wrote:Jack good point re Adelaide. I'm seriously looking at mining towns in Queensland rather than the Tassie ones for the reasons highlighted by others ealier in this thread – land tax is the main reason we're starting to look elsewhere.Having said that, while I find properties locally with good yields ie, 8% plus, my money will stay in Tassie. We are not buying in high risk areas and our low income tenants are very reliable. The most recent property we purchased is a beach-side property, tenants in place and showing better than 8%. We bought under market value so have gained instantly, rather than leaving it to 'normal' capital growth.
Keep looking, they're out there.
Cheers,
TraceyHi Tracey,
I like your strategy keeping that cashflow healthy with those 8%+ yields.
I also think you are bang on the money with Central Queensland. Once they dispose of the excess water that’s limiting access to pits and infrastructure in those CQ mines their economy will take off I think. I read an interesting article in the weekend edition of the Fin Review that predicts the Qld economy to grow at 5% 2011-12 and 5.25% 2012-13 as exports of coal start ramping up and investment dollars come into fruition. This growth is predicted to outstrip all other states.
Great time to be buying with all this doom and gloom around as well.
I’ll be on the hunt again within the next 10 months.
Jack
fredo_4305,
I wouldn’t be too concerned about Queensland mate. The financial year 2011-12 we are going to see some massive investment due to the resources industry expanding. Queensland should display the strongest growth economically out of all states. Queensland predicts strong exports, a big jump in investment and household spending will drive gross state product up by 5% in the next 12 months and even reach 5.25% in 2012-2013 (A. Rollins, June 25-26, 2011, ‘Mining largesse inconsistent’ The Australian Financial Review).’
I bought in regional Queensland 2010 and will look to buy again in 2012. Great time to buy because the majority of uninformed investors out there don’t understand the underlying fundamentals. Again due diligence applies. I think it may be some time before Brisbane picks up but there are some great regional markets out there.
Jack.
jim beam wrote:Everybody has their own criteria for investment. I think real estate in Tassie is appealing becuase its a low capital entry (Hobart is lowest capital city in Aus) and generally offers 5% + return with limited downside.
For what its worth hobart had the highest capital growth over the past decade of any capital city in aust.
before everyone says thats becuase it came off a low base… its still coming off a low base compared to mainland.
with pop growth of less than 1% (considering it was nil for nearly 20 years!! this is a huge turnaround) if it reaches what the rest of aus is the number of new homes required will triple. There are 43,000 homes needed by 2028 currently there is only 2500 pa being built.
25m people on the main island and 500k on the small island
No one knows what is going to happen its hatrd to argue that capital growth seem more assured in metro mainland however if Tassie gets found then undoubtledy it will be turn out to reward the investors with continued above average returns for the reasons above.
Fair call jim beam.
However, my argument would be that states on the mainland have far greater prospects for economic growth, infrastructure investment, population growth. Even though Hobart may have had the highest cap growth over the past decade of any capital city in Australia, there are other markets within markets on the mainland that have had stellar cap growth in the last 10 years.
Don’t get me wrong mate, Tassie is a beautiful part of Australia but I can’t see the economic and population growth that would warrant me to put my money in the Tassie market. If I was looking for a low entry cost I know I could go to Adelaide with the lowest entry cost of all mainland capitals cities but huge potential with a burgeoning resources industry and huge spending in infrastructure.
Jack
ALF1 wrote:Well said JT7 – you must be a local down south like myself. Yes, Seaford is going to be HUGE and I forgot about the rail extension so infrastructure down south is amazing and getting better!Hi ALF1,
No not local just well researched I guess. I’m interstate but travelled down recently to finalise a purchase west of Commercial Rd in Seaford for all those particular reasons.
Adelaide just has so much to like about it.
Beautiful part of Australia as well Anthony.
Jack
JT7 wrote:ALF1 wrote:Hi BytheBay.I live in Adelaide and yes the are areas in Adelaide that we believe will receive phenomenal growth are places such as Christies Beach, Port Noarlunga South, Aldinga, Moana, etc in the south and Two Wells, Virginia, Gawler, etc in the north. Opening of Northern Expressway; widening of Southern Expressway; and the $817million expressway overpass of Main South Rd to connect both the Northern & Southern Expressways signals great growth potential for many areas around Adelaide. Median house values grew from $234K in Sept 2005 to over $400K in Sept 2010 (rpdata). Oh yeah, Adelaide has been the sleeper for a while now and we're already starting to see the signs of it's growth taking off – and it's still the cheapest mainland capital city to invest into and our rental returns have always been consistent and strong.
I would agree. I particularly like Seaford which stands to benefit the most from both the rail extension and duplication of the railway bringing it closer to Adelaide. Great potential west of Commercial Road for renovation to circa 1970 properties (add value and yield), rezoned recently to Res B, transport infrastructure and shift of baby boomers to the Fleurieu Peninsula over the coming years, increasing population and industry, seaside lifestyle, strict adherence to a town planning strategy of ‘infil’ rather than ‘urban sprawl’ not to mention the benefits of a burgeoning resources industry over the coming years!
What’s not to like about Adelaide and in particular those Southern Suburbs.
Correction, duplication of the southern expressway
ALF1 wrote:Hi BytheBay.I live in Adelaide and yes the are areas in Adelaide that we believe will receive phenomenal growth are places such as Christies Beach, Port Noarlunga South, Aldinga, Moana, etc in the south and Two Wells, Virginia, Gawler, etc in the north. Opening of Northern Expressway; widening of Southern Expressway; and the $817million expressway overpass of Main South Rd to connect both the Northern & Southern Expressways signals great growth potential for many areas around Adelaide. Median house values grew from $234K in Sept 2005 to over $400K in Sept 2010 (rpdata). Oh yeah, Adelaide has been the sleeper for a while now and we're already starting to see the signs of it's growth taking off – and it's still the cheapest mainland capital city to invest into and our rental returns have always been consistent and strong.
I would agree. I particularly like Seaford which stands to benefit the most from both the rail extension and duplication of the railway bringing it closer to Adelaide. Great potential west of Commercial Road for renovation to circa 1970 properties (add value and yield), rezoned recently to Res B, transport infrastructure and shift of baby boomers to the Fleurieu Peninsula over the coming years, increasing population and industry, seaside lifestyle, strict adherence to a town planning strategy of ‘infil’ rather than ‘urban sprawl’ not to mention the benefits of a burgeoning resources industry over the coming years!
What’s not to like about Adelaide and in particular those Southern Suburbs.
Cameron Thompson wrote:The options above are good, however have you considered that maybe you could spend 10,000 or so REALLY investing in renovating it? You dont need to change any of the house’s structure, but repainting the house, maybe change the shower and water basin, or put in new shelving and modernize your kitchen and such, can REALLY add value to your home, and you may not even have to lower the price as much, so in the end you make your money back.
my 2c, cheersMight not be any value in this method considering it’s a near new product (built 2008). I’d be doing exactly what Coalstar is proposing (and have done) ie. get a depreciation report done by a QS and then get your accountant to implement a tax variation.
Heath Workman wrote:Jamie M wrote:Heath Workman wrote:you can pick up positively geared properties down there for under 100k.Hi Heath What's the historical growth been like in these areas and are there any driving factors that will lead to growth in the future? Everyone loves a CF+ IP but if there's little or no growth, it's not worth it (in my opinion). Cheers Jamie
From what I've read online these properties generally doubled in value from 2000 – 2010, obviously though double 100k is still only 200k so your looking at 100k of growth compared to say 400k in other parts of the country. The only driver there is the mine really. MMG (Mining Company) reported that current exploration will provide work beyond 2020. Having said that if the miners ever packed up and left I don't know how you'd ever sell a property down there.
I’d want more security than exploration work beyond 2020!
Some of the area’s up in Central Queensland such as the Bowen Basin and now Galilee Basin not only have a coal resource expectancy of 100 years but strong cattle and agricultural industries as well.
Many of these areas offer strong cashflow with cap growth. Simple supply and demand.
You can still get into areas like Collinsville and parts of Rockhampton for example for sub $200k with much stronger fundamentals.
Jack
Jamie M wrote:Heath Workman wrote:you can pick up positively geared properties down there for under 100k.Hi Heath
What’s the historical growth been like in these areas and are there any driving factors that will lead to growth in the future? Everyone loves a CF+ IP but if there’s little or no growth, it’s not worth it (in my opinion).
Cheers
Jamie
Tasmania is a beautiful part of the world but I’m just not convinced on the economic drivers as Jamie suggests that drive growth. Are the younger generations staying in Tasmania or are they migrating to the mainland in search of work? From memory, demographic statistics suggest they are. You may see the shift of baby boomers migrating to Tassie in retirement or perhaps they would prefer to down-size and move from cities such as Sydney to the central and southern coast of NSW or the Fleurieu Peninsula from Adelaide and remain close to their families ie. grandchildren.
IMHO I’d prefer to put my money elsewhere. If your looking for high yields then I’d prefer the Western Suburbs of Sydney, Orange, Bathurst where the economic and the underlying fundamentals are solid. Or alternatively, if you are a believer in the resources story you can chase spectacular yields and cap growth in the resource rich states like WA or QLD and soon, SA.
Just my opinion guys but food for thought.
JT7
Lefty wrote:Hi Jack,I am in Negoa Rise. Which property manager are using?
Lefty
Hi Lefty, I'm with Athene @ Ray White. I've found her to be very good and not shy on keeping the rents up to market value. I've had a couple of good long chats with her and get the feeling that If I was a tenant I wouldn't want to get on the wrong side of her! Don't get me wrong she's lovely but doesn't <moderator: delete language> and that's reassuring as a landlord. How about you mate? Jack
thecrest wrote:Suggestion.
If I was renting to the mining market, it'd be like this :
Fully furnished
3-4 brms
2-3 bathrooms
huge gas HWS system(s)
Gas ducted heating
R/C split system air con to every bedroom & common rooms like lounge
BBQ & deck
Turn lawn into parking
Hi Speed wi-fi
Big flat screen
Beer fridge in the garage
The mining guests are mostly guys, want comfort and have a big budget
and rent long term.
At the moment, my friends with motels in Orange, Bathurst and Lithgow are under pressure to rent out every room to mining Monday – Friday, some starting Sunday night ready for the early starts. M-F occupancy is 100% most places. Weekends are slower and reduce the weekly occ rate to 80%.
No motel will rent out all their rooms every M-F to a mining company for fear they will lose all their existing client base and have nothing if the mining co moves the men. So a well furnished comfy big house or units would do well. Send in a cleaner weekly, and leave a blank page for repairs & maintenance. Mind you, a lot of them are tradies anyway.
Rent it by the week or month as a package, charge for utilities as well.
Advertise in local papers. Price , charge for whole house only at the rate of $200 per room per week + utilities.
Their option is to pay for a motel room at about $80 per night.
Cheers
thecrestHi thecrest,
great post mate very informative. I have property exposed to the mining industry in Central Queensland and have been looking at Orange and Bathurst for a while now.
My only reservation is how sustainable these high returns are…I’d be interested to hear your view.
If I remember correctly whilst looking at Orange and carrying out my research I read there was a substantual amount of land to be released by the council for residentual development which may have an inpact on the demand – supply dynamic.
That all being said…the underlying fundermentals for both Orange and Bathurst are very healthy and I’d be happy with an investment in either city.
Jack.
Lefty wrote:Hi Paul,Bought in Emerald last year. Bought in a high & dry area. Do your reserch as it will apy off I.E Rent increase of $100p/w in the 1st year & $30K capital growth.
Regards
LeftyHi Lefty,
I also got into Emerald early last year. Picked up a little cracker on Esmond Street – Sarah Court. High and dry and its doing very well for us. Great cashflow and some really good growth over such a short time frame. I’m confident the best is yet to come…we are only just starting to warm up.
I’m very bullish on the underlying fundermentals in and around Emerald and I think we are in for a terrific ride over the medium to long term.
I’m keeping a very close eye on the developments out in the Galilee Basin.
Where are you mate?
Jack.
