Forum Replies Created
- shoooshoo wrote:Hey guys, have you considered Blackwater? i'm trying to search for the next Moronbah/Dysart, do you think this could be it?
Hi SHOOOO, Josh and everyone
I agree with Josh – While I like Blackwater I don't feel it will be another Dysart or Moranbah. From my research and experience these are my thoughts – Emerald is a large inland centre that has good potential now that there are new mines opening in Alpha and there are other mine expansions happening to its north add to that the fact that Moranbah and Dysart have just had a price explosion and you have to ask yourself are these good positive signs for future growth and expansion for Emerald.
Moranbah is a growing town and will come into its own down the track – they are trying to be the next Emerald and could do it over time IF there is more land released for development. Dysart is in a unique position and is pretty well land locked. Plus both these towns are currently in a hot market I am taking WB's advise and being cautious right now.Blackwater has potential but will be overshadowed by Emerald due to its proximity to Emerald. But I think it has some good potential cashflow positive property where Emerald may have better potential for capital growth long term. Capella and Clermont are interesting towns but I am not sure about them – Clermont is west of Moranbah and Capella is north of and close to Emerald and smaller than Blackwater.
I haven't been to Alpha so I won't comment on it – I think Wandoan could be a smaller version of Dysart but Xstrata has to get the mine operational and since that is some time away. its a bit of a punt – right now it is a small town – I would prefer Miles if I was investing in the that part of the Surat Basin.
Back to the Bowen Basin – Middlemount is interesting but for some reason doesn't appeal to me (at this time) and then there is NEBO which I think has been overlooked and has some potential – there is still some cheap land available its 100 km from Mackay and 100 km to Moranbah and on the Junction to Dysart and Middlemount. AND there is a new railway maintenance depot about to be built at NEBO and its one big shed which will be able to house a full length coal train under one roof – that's about 2 kms in length.
See attached links http://www.dailymercury.com.au/story/2011/06/01/coal-rail-project-delivers-jobs/
http://www.abc.net.au/news/stories/2011/06/01/3232793.htm?site=capricornia
http://www.ndy.com/projects/nebo-rail-maintenance-facility
Josh – you are the regional expert – I know that Emerald is your favorite town – However I would like the hear what your thoughts are on the potential of Nebo as a place to invest?
KeyStrategies wrote:Hello JoshTime to remember this quote by Warren Buffet
"Be fearful when others are greedy and be greedy only when others are fearful”.
Here is an article that makes interesting reading and should make smart property investors wary
http://www.dailymercury.com.au/story/2011/07/21/bidders-queue-to-buy-homes-moranbah-investment/
the front page of the paper was about a house that Sold for $840k a new record HighI think this is a great sign for the surrounding areas based on concentric investment theory
cheersHello Josh
I will be renting out the duplex unfurnished – Just about to appoint agents and have been advised that the rental market has moved up again. I can now expect rents of $1900 to $2000 per unit per week – Moranbah is on fire.
Time to remember this quote by Warren Buffet
"Be fearful when others are greedy and be greedy only when others are fearful”.
This famous quote by the genius and hugely successful stockbroker and Investor, Warren Buffett sums up the right way of looking at any investment market and applies to the property market. In short, he’s saying to buy low and sell high, this may sound simple but as it’s human nature to get caught up in the excitement of a rising property market and to walk away in fear from great opportunities when it pulls back a little, it’s easier said than done.
Looks like its time to reassess my property investment strategies again
Cheers
Hi ABCD
Looks like the financial experts were on hand to assist – the only other point is that maximum amount of loans a lender will do in one area and that seems to be about $1.5 million per lender – but once again check with your bank or broker
cheers
Good Morning ABCD
Your question could be "How long is a piece of String "? SO the answer is It Depends
Which mining areas – WA, Qld, NSW or Victoria?
Which Lender?
Which Mortgage Insurer?
How big is the Town?
Which mining activity – Coal, Iron ore or Gold?You need to be more specific – My experience (which is limited to coal mining towns in Qld and NSW) is the major banks will lend 80% of Valuation or Purchase Price whichever is the lower.
Ideally this question should be answered by a Lender / Mortgage Broker
Hope this Helps – Cheers
Portfolio PI wrote:Hi Keystrategies, Thanks for your post its great! The Bowen Basin has two major service centres. …………….. I am keen to hear your thoughts on all of this.Hi Josh Thank you for your comprehensive answer – lots to consider and you have some very valid points – Emerald is quite a large and established centre that should provide stability in the longer term but then towns like Moranbah are growing also.
I think it comes back to the strategy an investor wishes to pursue and how they wish to allocate their portfolio and spread risk. I like some of the smaller towns up in the region with high rent returns which I balance out with IP's In Sydney which has more perceived security and capital growth prospects.
On the other Hand I have a colleague who is heavily invested in Dysart – a bit too risky for me – (but that's just how I see it) he is quite comfortable with it and has had great capital growth and increases in rental returns.
I think you summed it up quite well in saying that "What Emerald positions itself as, is a long term, secure investment which also achieves reasonable rents and good solid capital growth as a large percentage of the population is owner occupiers, hence the lifestyle opportunities and the ability to sustain a family model in this area. If you are looking to hold a property for 10+ years, you would obviously be looking for long term growth and security as a property investor. "
Emerald may be a place that I might consider to invest at some point in the future but I feel there are some better options for me around at present in the smaller surrounding towns as I am looking for cashflow rather than long term growth – just my strategy for where I am in my property investment cycle.
I also believe that investing in property is not just about trying to achieve the highest rent possible, it is the longevity and continued capital growth that I and other investors also look for – but sometimes you can achieve cashflow in one area and capital growth in another.
With regard to the Surat Basin (Miles and Chinchilla) I have replied on a separate post.
Thanks
Hi everyone
The major mines I was referring to are closer to Miles – Wandoan by Xstrata yet to commence and Cameby Downs as you have noted
For Information on the Surat Basin see below (courtesy of http://www.greenakersestate.com.au/) David Sweetapple is the local Agent and a Land Developer in Miles
The Surat Basin region is a rich resources and energy province stretching across the Western Downs, Maranoa and Toowoomba regions. It is reported to be the fourth largest gas producing region in the world with proposed capital expenditure currently at around $140 billion.
Because of its large resources of open-cut thermal coal and coal seam gas, it’s set to be one of the boom economies in Australia.
Population growth in the Western Downs region alone is predicted to jump from 30,000 to 75,000 over the next few years and the State Government has allocated $24 million dollars of funding to the region’s development.
Planned and committed projects include:
Wandoan Coal project (Xstrata Coal Queensland Pty Ltd)
Surat Basin Rail (Wandoan link to Banana/Gladstone)
LGN gas pipelines to Gladstone (Arrow Energy; BG-QGC; Origin Energy)
Surat Gas Project (Arrow Energy)
UCG fertilizer and UCG Power station (Carbon Energy)
Wind Farm (AGL)
Coal Mine: Guluguba/Wandoan (Cockatoo Coal)
Kogan Creek Power Station (CS Energy)
Ergon Energy Infrastructure
CSG Power Station Braemer (ERM Power)
UCG gas to liquid plant (Linc Energy)
Substation (Powerlink)
Cameby Downs Coal Mine (Syntech)
Moonie Oilfields (Santos)
Nathan Dam to Dalby water pipeline (SunWater)
Warra and Glen Wilga Coal mines (Tarong Energy)
Tarong to Wandoan powerline (Powerlink)
Wandoan Gas and carbon project (GE Energy)
Read more about the booming Surat Basin Region:
Qld Govt funds SUrat Basin Projects March 2010
Surat Basin to become one of the nation's boom economies
Surat Basin receives $23.65 million in State Government funding March 2010
Trust that this info assists you in making a decision and taking action to invest in property
As my JV Partner keeps telling me – Property Investment is NOT Rocket Science you just need to have the commitment (Balls) to back your judgement and actually do something
Cheers
Hi Guys
Just came across this article in the local Mackay Daily Mercury – Its worth a read – Not the first article I have seen where miners are protesting over FIFO or accommodation issues
http://www.cqnews.com.au/story/2011/08/10/moranbah-north-miners-have-begun-protesting-over-w/
Also the Coal conference was held on the 8th August 2011
http://www.dailymercury.com.au/story/2011/08/08/coal-conference-underway/
I have to agree with the comments by Daedalus earlier in the thread.
"FIFO will only last while it's cheaper for the mining companies than paying rents in mining towns.
FIFO may occur, and if it does then rents will fall. Then some time later, the mining companies will notice that it's cheaper to pay for rent than flights, and they'll stop FIFO.
If FIFO is being seriously considered, then we have an unsustainable situation with rental properties: the yields are simply above the tolerance of the market. Unsustainable situations are ….. unsustainable.
Rents go up and down in mining towns. If you believe that 14% yields will go forever you are mistaken. The market can't afford it and will seek alternatives – even ones that seem ridiculous.
It would seem though that if rents were a little lower than they are now (but still well CF+), then FIFO would not be attractive to the mining companies. Perhaps we landlords are pushing things too hard and causing our own demise?
You can shear a sheep for life, but you can only skin it once.
Daedalus."
Cheers
Johnny1974 wrote:Hi all Just my thoughts…… I to agree the world financially is pretty toxic at the moment and has been since 2006. Seems everyone, every sector, in every country is being hit hard. The only shining light is the worldwide mining industry. We have strategically sold down our portfolio of six properties to two since 2006. Taken the profits and walked away
We now have no debt, work less, have less stress. Hard work and property gains have enabled us to do this. For now I will keep all that cash fixed at 7% in the bank, don't have to worry about tenants, rates, insurance, repairs and the possible removal of negative gearing tax breaks. Maybe its time we all looked at other avenues to invest?I have to agree with Johnny and the comments down the thread – I too have strategically consolidated my position in the last 18 months or so – down from 11 IP's back to 5 – paid down debt and increased equity to just 50% LVR and now very cashflow positive. Less stress and less hassle in my life is a much better Strategy – Sometimes "less is more" in my case more time and more money to enjoy myself instead of just feeding the bloodsucking banks.
As to where to from here – look for the opportunities that will be springing up – There is a resources boom – So take advantage while you can and make hay while the sun shines
cheers
Hi Josh and everyone
Have not been on the Forum for a while – Josh Interesting that you have undertaken this trip – I did a similar one mid July travelling thru Toowoomba, Dalby, Chinchilla, Miles, Wondoan, Blackwater, Emerald, Capella, Clermont, Moranban, Nebo, Dysart and Middlemount. I did not get a chance to stop in Mackay, Rockhampton or Gladstone perhaps on my next trip. I have to say you have provided great info Josh although I don't totally agree with all your comments but that's the beauty of being individuals and having differing opinions.
When it comes to the Bowen Basin – Moranbah and Dysart appear to be the epicenter of activity – both rents and prices have jumped dramatically in the last 6 to 8 mths so I am wary of the market right now – ( I have watched this market for the last 12 months and I am in the process of having a duplex built in Moranbah on a block that I purchased in Feb 2011 – it has worked out to be a great investment, I have a great builder up there – Total cost $800k with a rental return of $3500 per week for both units)
I am wary of Emerald – just based on Supply and demand of current accommodation and distance from the mines particularly if a time or distance constraint is put in place on workers – Eg DIDO or BIBO no more that 100 kms or 1 hr drive from the mine site.
Also workers currently seem to be based in Motel accomodation – almost impossible to get a room when I was up there I was so lucky to get a room on a last minute cancellation – Thought I was going to end up sleeping in my emergency tent or the car at one stage.
My personal opinion is that Chinchilla and Miles are worth watching in the Surat Basin particularly when a couple of the new mega mines start in the area – I feel that Blackwater is a better prospect than Emerald for cashflow positive properties with the International coal centre being then plus more infrastructure coming into the town (what is your opinion and what does your research show?)
All in all its an interesting part of the country and I will be adding a couple more properties to my portfolio up there over the next few years but I will be proceeding with caution.
Cheers – keep up the good work
Hi Lifestyledestiny
I just concluded a purchase and transfer of Tickets from another member – the efficient Emy from PI office made it easy
Hope you have some luck selling yours I will let some of my friends know about your tickets – you may wish to put in an updated post to advise you still have them available
thanks
Hi Kelly,
Thank You – Deal concluded with tickets transferred by the efficient Emy from Steve McKnights office all with a minimum of fuss
Cheers
TC62 wrote:Gee Property Investor1, if I didn't know any better i'd think you were PennyBaker's brother. Again, pretty over-the-top with 'glowing praises' considering this is your first post. Like Penny, most people will read your post with a grain of salt.Greetings Forumites – from a seminar veteran
Now I am new to the forums but after spending tens of thousands of hours and dollars in various free and paid events/seminars and having invested in numerous property investment "home study courses" out there – I can confirm that you guys are right – there too many of these spruikers out there and the MO is – run a Free event that could be from 1 1/2 hours up to 1 day – this leads to an up-sell into a 2-3 day event for $3K to $6,000 which then turns into an upsell for 12 mths "mentoring" from $25K to $50,000 for information that is readily available in these forums and on the net for FREE or that you can find in books and audio programmes for a fraction of the price.
Granted I have met some great people over the years and have learned a few things, the seminars have generally only served to confirm that what I have been doing was working and that I was on the right track with my own investment strategies.
I have not come across this Luke Giford before but based on the number of glowing single post recommendations it appears that self promotion is seriously at work here.
My suggestion for anyone thinking of attending seminars is go to at least 10 FREE previews first and leave your credit cards at home – That way you have a chance of assessing the information and Not getting sucked in.
The thing is Presenters use the guise of Education to gain leverage – to make out that they are gurus and get you into a room for 2 – 3 days at a time to influence your thinking. The aim is to get to get you to think that you know and like them and that they have the answers you need to progress. As Kiyosaki says when emotions are high – Intelligence is low and that's when they strike.For newbies and veterans to the Property Investment scene if you are thinking of attending seminars you should do your due diligence on presenters and promoters before going down that path – thank god for google search
Let me say this – I would NOT recommend anyone go and pay $25 to $50K for a 12 month mentoring programme from any of these spruiker's. There are many horror stories from people that have, only they get buried in the back pages because these guys are smart and know how to manipulate and use the internet.
Oh and if you are not happy with the home study course or programme make sure you get your refund and if not report the issue to FAir Trading and post it to the forums
Just my opinion based on my 20 plus years experience of attending seminars and investing in property.
You have been warned
Cheers
So Guys
I am interested to hear how you went with the courses and infoHello Rita
I have built a house with a seperate granny flat but that was in NSW- I had to have 2 seperate electricity meters so I could have 2 seperate electricity accounts which also meant the the granny flat was wired seperately – I would speak with your property manager – you may need to rent out the properties at a higher rent but with electricity included is one solution OR you may have to get an electrician in to rewire the granny flat and put in another meter. That's a couple of suggestions to start you off
cheersryan mclean wrote:Positively cash flow properties definately exist, and yes I have seen many properties that fit into Steve's 11 second rule. Though I haven't seen any of these properties in capital cities, only in rural areas. But not so rural that you could never get anyone to rent it.It Australia it seems that most of the positive cash flow properties have to be made rather than bought. Because everyone has wised onto the fact that positive cash flow investing is awesome prices are pushed up, meaning there is less chance of positive cash flow.
Look into creating a positive cash flow property through renovations, creating dual occupancy, subdivision, rent out a granny flat separately etc. If you use your creativity you can definately achieve a positive cash flow result.
You are spot on – I am in the process of building a duplex that meets and exceeds the 11 second rule – Market value will be $550K on completion and the rent is expected to be $1100 per week in today's market – The beauty of this deal is it only cost me $400k to build the unit and I am looking around to find more deals like this but some that are already existing – Thinking outside the square and having the right strategies certainly pays off
cheersHi Marie
NO just after one myself – happy to share
Ojay
Joint Ventures are an excellent strategy to fast track your returns in property but they are also fraught with danger. I have been involved in a number JV's for over 10 years now and have done very well for both my partners and myself. There must be a level of trust established before going down this path and you must look into the legal aspects also. Formal JV agreements and understanding upfront of everyone's responsibility and risks save problems down the track.
I have done deals with Family and friends after they watched my success over the years.
You must also be very careful NOT to fall foul of the authorities regarding licences that may be required and the limits set by ASIC and the managed investments Act.
Make sure you do your research is it has bought people undone in the past.
If you have the runs on the board as you say – your accountant and solicitor are a great place to start
Kelly I am interested in purchasing your tickets – I need to ensure that they are transferable – Just had a problem where I bought Tickets from a mate to attend a Ccorp seminar but then could go as they were NOT Transferable according to Ccorp – But that was probably a good thing based on what I am reading about Carly Crutchfield on the carly Crutchfield exposed websire anyway
Hello Be rich by 2012
I have applied a couple of excellent strategies that have worked for me over the years – Subdividing is one of them as is building duplexes (another form of subdivision) – I am currently building 4 Duplexes in NSW – Total cost is $550k per duplex pair with an estimated market value of $660K on completion – rent returns based on current market of $360 to $370 per unit per week – so I create instant equity of $110k and end up Neutral to positive cashflow depending on how much cash I leave in the deal. I pay cash for my sites and use lines of credit to fund construction then refinance on completion – works a treat.
My current Qld project is a better – $800K total construction cost for a duplex – Estimated market value on completion is $550K per unit and the rent is an outstanding $1100 per week per unit (increased from $950 per week when I initially did my research late last year) – So again instant equity and cashflow positive.
Granny flats are a great way to increase yield in an existing property also – Have you looked at ways to increase the cashflow from your existing properties?
The deals are out there – its a case of seek and you shall find
cheers
We now have no debt, work less, have less stress. Hard work and property gains have enabled us to do this. For now I will keep all that cash fixed at 7% in the bank, don't have to worry about tenants, rates, insurance, repairs and the possible removal of negative gearing tax breaks. Maybe its time we all looked at other avenues to invest?
