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Great news for Alpha, Emerald and the Galilee Basin. GVK are talking with banks and financial closure in a years time. Coal production likely to start in another 1-2 years after that.
GVK – talking with banks and financial closure in a years time…
I've often wondered about the title of that book and dismissed it as being too good to be true. If you read the ATO ruling, it says that whilst each case must be judged separately, if a reasonable person thinks a tax advantage has been obtained, then they won't allow you to do it. Did the book say anything about that ruling keenan031?
How easy is it to find tennants for these annexed units / houses? Since privacy may be a concern, it won’t suit a lot of people, so what is the demand like and who is the demographic?
Gilly61 wrote:Hi Richard,You said,….
"There is no easy answer to becoming financially free and it certainly won't happen over night.
Took me 10 years to build my portfolio and another 6 to have almost the entire investment debt repaid."
Would you be willing to share how you did this? So many strategies I see are – pay interest only and never sell. So debt is never repaid….which I dont feel entirely comfortable with. What did you do?
Cheers
Gill
Gilly61,
If you go through and read Richards posts from all sorts of threads, you'll see he is extremely successful and way above the average investor. He has over 40 IP's which earn over 600K a year and for his 24 Million dollar portfolio, he is down to his last million in debt. I'm sure he didn't start out paying P&I on his loans, so he'll need to answer how he has done that. He is a big advocate of CF+, which will have helped him continually build upon that empire and whilst I'm sure the boom from last decade helped propel him to where he is today, the principles remain the same. You need goals, objectives, knowledge, a balanced portfolio and CF+ to continue to grow, to name but a few ingredients…..
Your situation is similar to mine new2invest…. I have just purchased #2 and both properties were financed this way. I want to save up to spend some money on PPOR, which should increase it’svalue, so I can do another equity loan against PPOR in 2-3 years time. Our bank accounts now have several loans/accounts but at least there’s no cross collaterisation. Whilst both properties have only just settled over the last 8 months, Jamie I have a question for you…. For #3, would you suggest the same principle or perhaps try to release equity from #1 and 2, (since they are financed with the same lender), rather than a PPOR equity loan?
GVK Hancock Coal say high productivity and low costs are the reason they'll continue, regardless of market conditions….
http://www.miningaustralia.com.au/features/we-need-to-talk-about-kevin
Trent, there's no denying the Chinchilla market is currently up but so was Emerald, Moranbah, Port Headland and Gladstone 12 months ago. I have an IP in Emerald and whilst Emerald and Chinchilla are not necessarily reliant on the one single industry, the effect of one industry can impact the market. When employees and contractors left Emerald last year, it had a downward effect on the market and there is currently an over supply. Emerald's population is about 13000 compared to Chinchilla's 4000 people. There are currently more than 11600 people working with QGC and it's contractors on just their project alone, but once construction of the pipeline and Curtis Island is complete, QGC forecast about a tenth of that. Will your clients still be able to get $600-$800 per week once construction is complete? How many weeks will they have a vacant property? Will they be able to sell high enough to make money on their purchase? I would have loved to have purchased an IP in Chinchilla but feel I missed the boat. Whilst Emerald is currently down, it still has the big Indian projects in the area with GVK's Alpha Coal and Kevins Corner out towards Alpha, who are set to work with Theiss and Aurizon, so I'm hoping these will put an upward pressure on the market once people and contractors are recruited again. Investing in a resource sensitive market always carries a risk and I was happy to gamble on Emerald because of the projects still progressing, even though other companies have slowed. However, the gas industry is in it's construction stage and infancy so even though your clients might be making an extra 20K profit this year due to the higher rent, what will happen in 2015? Would love to know your thoughts….
Great read Freckle! Whilst we all agree capital expenditure has peaked this year and China's demand has slowed, page 23 reads, "severe production constraints in Australia led to a sharp price increase in CY11". I wonder what would happen if the AUD drops to 70-80 US cents and we have another summer of floods like 2011? From page 24, "Future supply growth is predominately Australian" and the graph shows over half of the worlds supply from Australia, now and in the future. Moranbah's real estate market at it's peak was never really sustainable, and given BHP acknowledge the dampening effect of LNG on coal, we may never see a repeat of the last few years as far as real estate in mining markets is concerned….However, it looks like coal will remain a huge part of Australia.
I don't think you can compare the two, (Surat and Galilee Basins), since they are different industries, (gas vs coal), at different stages/cycles, requiring different work forces. Whilst coal has seen to be dependent, (especially of late), on it's price as a commodity and perceived demand, gas is still in it's construction phase, so the real measure will be when construction of the pipeline and Curtis Island is completed. Even then, as the LNG industry takes off, it will still be driven largely by price and demand but with the key difference of requiring less ongoing workforce as coal is more labour intensive. Emerald's market softened when the coal price and demand dropped, projects were delayed/cancelled and contractors left town. Like the price of oil, once the demand increases within a couple years, (stemming from current reduced supply levels), the coal price will increase and the market will rise again. My 2 bed, 2bth apartment in Emerald currently rents for $400/week and that's when the market is down. These projects when they start will bring increased demand and the up and down cycle of the markets will continue. It's a matter of interpreting it yourself and deciding if you want to take the ride.
I have signed a contract on an IP in North Lakes due to it's huge growth drivers. Whilst it's a Stockland master planned community that hasn't seen much CG over the last 10 years due to the land releases, they only have 1000 blocks left now, which is about 2 years worth at their rate of about 500 blocks per year. Complimenting Westfield North Lakes, the massive business infrastructure that's finally about to take place, includes Bunnings, (which is currently being built), Costco's first QLD store, Ikea's second Brisbane store and new cinemas. Hundreds of jobs are coming and with the new rail line due in 2016, North Lakes now has all the ingredients for growth. Vacancy rates have been at 1% and there are several distressed sales on offer where people have lost money, (going by property history), as the market is lower than post GFC when prices where higher. Whilst land values have decreased due to the continued land releases, my DD feels this has good potential and now is a good time to buy when the market is down. Time will tell….
foxyleemoo… Try QGC's website to get an idea how their 9000 strong workforce is currently being utilised, along with with progress updates to the first LNG in 2014 and the local councils for your information. Whilst they'll be still be sinking wells for quite a while, it'll be a gamble as to whether supply will then outstrip demand after the construction is completed and the workforce drops. The right time to buy in would have been when the announcement was first made about the 40 Billion Dollar project and then trying to sell at the peak.
Matt39… Your DD needs to include research from this forum https://www.propertyinvesting.com/forums/property-investing/help-needed/4337447 and looking into the workforce numbers…. If you take QGC as an example, they currently employ about 9000, with a large proportion involved in construction along with a lot of contractors. Whilst there's no doubt that extra jobs will have been created once construction has completed, the gas industry does not require the ongoing labour intensive workforce that coal mining requires. The sheer volume of housing that is being created can't keep up currently but do you believe that will still be the case once construction is completed within a couple of years? Please look at Emerald, (and Moranbah), as to how the market can change, once the jobs dry up and contractors leave town. There's no denying there's a lot of people still buying into Chinchilla but be careful about buying into a market at it's peak, unless you think it's sustainable. They are marketing these packages purely to make money whilst they can, but hopefully not at your expense.
Gina Rinehart is now the worlds richest woman…. We knew this project was coming but great to see it's official. I'd imagine that will put more pressure on the Emerald market…
shawnfromsydney wrote:why has property gone up by over $450K in just 10 years in Gladstone?
I just cannot see why….can somebody explain this to me?shawnfromsydney… Cmon buddy… You seriously don't know?…. Why are crappy little old houses fetching up to a million dollars in Moranbah and earning $2000-$3000 a week in rent….. The same principle that governs the worlds economies….. SUPPLY AND DEMAND.
Aviator77 wrote:Has anyone had a look at property in Emerald of late? Its almost impossible to get any decent investments there. Its like the demand has outstripped the supply and they are not producing enough residential housing to accommodate this demand. Your thoughts on this situation Josh?I have just got finance approved for a unit in Emerald at Hillcrest Villas, one of 26 units that have just started construction at Riverview estate which I purchased through Josh. The next stage of Mayfair Ridge, (Stage 7), is also selling but apart from these, there's not a lot coming up for Emerald, which is why the market is so tight and why I chose Emerald over other areas.
Going back a few pages, there were posts about finance approval at high rates of LVR in mining areas….DO NOT USE SUNCORP, as my application was denied due to LVR being over 80%. I ended up having to purchase the unit for an extra $5000 after the finance date lapsed because Suncorp was too slow and I didn't have enough time to apply for finance elsewhere. Since Suncorp cost me $5000, I have lodged an official complaint with them, so do not use them for both reasons of inefficiency and LVR.
I can't wait for the unit to be completed so I can see what the market does in the next 6 months,
I'm sure those of you following this thread would have seen this about Australia's biggest coal mine… http://www.news.com.au/business/miner-mapping-out-new-outback-town/story-e6frfm1i-1226270256096
Adani's plans are in the initial statement advice http://www.deedi.qld.gov.au/cg/resources/project/carmichael/initial-advice-statement.pdf
The production of this mine will be massive. Any thoughts on how we can benefit from an investment point of view? I have been looking at Bowen real estate but have noticed a huge amount of land for sale. If you know the layout of Bowen, you'll know there is a lot of space around that is being developed and I'm wondering what that will do for supply and demand.I'm a corporate travel manager and we struggle to find motel accomodation during the week for our clients in Mackay, Emerald & Gladstone, (especially last minute where you call 25 places and still can't find anywhere). Moranbah is booked out for 4-6 months ahead and it's hard to get mid week accomodation in Dalby, Chinchilla & Miles. Some motels are smart and have a lease to a unit/apartment/house for overflow and even the contracting companies are now holding months of accomodation at a time in apartments/units in Rockhampton & Gladstone. Rocky is also starting to feel the flow on effects of Gladstone.
I grew up in Mackay and whist I haven't lived there for a long time, (now live in Brisbane), my family are still there and I go back to visit regularly. Mum is at Slade Point/Lamberts Beach which is about 10-15 minutes from town, (just north of the harbour and close to Andergrove), and has never had flooding issues due to the sandy ground. It's probably not the ideal location but you'll need to do your homework on which areas are flood prone since in big flooding event of 2008, the river flooded a lot of areas and even places in town away from the river had touble due to drainage. Mackay is not as bad as Roma for example with flooding but there are a lot of low lying areas. It's great driving around and seeing all the renovations, extensions & decks as a result of the mining industry.
Even though my unit in Emerald hasn't yet been constructed, I'm already ahead by 10K as the remaining units for sale have increased due to demand. I'm aleady going to be looking for somewhere else to get a CF+ property in QLD and can see the mining/energy sector in QLD is going to keep on growing.
Gotta say thanks to Josh for this topic as it's been invaluable. I'm in the process of purchasing through Josh, a unit in Emerald that's due to start construction shortly. Can't wait for completion since I'm sure Emerald will keep booming this year. The hard thing will be to decide whether to get another CF+ property in Emerald or try elsewhere. Camjanice, that's great that you have bought 3 houses in 6 mnths…Now just to convince the wife that we should do it also.
