Buying locally and thinking you “know the market” is the biggest load of crap out there.

So what if you spent the last 20 years in one suburb, to me that’s a disadvantage. Yes it can be handy livig close to an IP for keeping on top of renos or babysitting tennants but thats about all the advantage you will get.

Do your homework, chances are you arnt living in a suburb with 10% pa CG, so go out and find one. Don’t be afraid of buying an IP outside your area. I would reinforce this remark if you live in Adelaide as SA is flatter than other states. The 10km rule is a good one but that will limit you.

Also if you have the cash, stick to a LVR of 80%. If you really think you are gunna get big CG then the extra leverage might be worth it. But by the sound of things you might compromise location for less risk being a first IP, so if you don’t get a decent CG then the mortgage insurance might eat into the earnings.

IMO you can't go wrong with the bowen basin and surrounding areas. All this doom and gloom of property bubble bust cannot apply to these mining areas, can it?. Some guy said it before… "lots of people with massive salarys trying to rent/buy properties that don't even exist yet".

Dispite key demand/supply data that is available now, you still have to look at the macro-economic outlook for the long term. I know this is speculation and I am indeed no guru on this topic but I will try to explain what I heard on the radio the otherday.

Basically it's a question of comodity price + demand. China has had a minor reduction in *growth* which has caused a massive overload of "the sky is falling" chatter. But the key word here is growth, i.e. it still has it.

From recolection it has been 10% p.a. for the last 3 years and now back down to 7%, which is still huge.
As growth slows, demand slows and as China is one of our biggest customers it will have an impact.

But when will we start to see a slow down in the energy/mining sector? Basically not any time soon.

If you have a look at the dollars spent investing it's rediculous. Something like energy up 40% from last year, mining up 20%.
Really if the big guys like BHP and rio + the AUS government were worried, it aint showing yet.

Check out mining atlas Australia and you'll see the main area for development is the bowen basin.
This also tells you where planned and potential sites are.
Then all you have to do is pin point where all this money is going…

Most of the towns suggested have seen growth in the last ten years at some point in time.
If you can afford the risk I would look at Chinchilla/Emerald/Bowen over Mackay/Gladstone.

But then again, missing 10% last year on gladstone was a worry of mine that has been and gone. Still looks good and if you try to time the market at the bottom all the time you usually miss (apparently).

Moree still has high yeilds and can see this discussion is almost a year old and perhaps a good time for a recap?
Anything developing?

Myrp data has 9.45% Qtr and 9.02% Yr growth… Seems like a good area for a first IP?

Interest paid on a loan for an investment property can be claimed as an expense which results in a tax deduction on your personal income if you are making a loss on the property (cash flow negative).

There are positives for both types of property but the thing with negativly geared property is that it must appreciate in capital value to make the investment worth while.

Note: I would say the same is true for CF+ properties also after some more reading  

A must read!

Fantastic article mate cheers for sharing. With that ammount of money being pumped in I'm not sure doom and gloom talk of the property bubble burst applies in these areas.

Old but relevent: http://australianpropertyforum.com/topic/8965098/1/

Also couldn't find the thread subscription button

Mining towns… $$$
But be carefull, one person says something, does another…

Wrong!
Aparently Chinchilla's ship has already sailed… 8 rears ago!
http://www.hotspotting.com.au/index.php?act=viewArticle&productId=27

Also I've heard great things on Gladstone, what depicts the ship sailing?

Bottom line is search for tips, then do your own research.

Is this  because it lasts longer? Wouldn't it depend on the size of the deposit?

Yeah this keeps coming back when doing my research and is probably one of the most important things to consider.

I have been reading one of Margaret Lomas' books and she says:
"Capital gain must take a back seat to cash flow", when buying for CF+.

The abundance of units for sale (potentially turned into rental properties) is concerning, but a stagnation or even deflation in unit prices should be a second priority, according to the expert not me.

Yeah leverage is a powerful weapon. Interest rate rises are always a risk.

I guess then LVR and liqidity are more important if things go to shiet.

Thanks for your words clint, I believe you have summed up the crux of CF properties vs neg. geared very well.

How important is this? If I'm not mistaken housing prices could drop say 10% for instance while rental returns remain the same or even rise…. hmmmm.

I asked in my previous post but seems it will get missed, "How much corelation exists between rental return and capital value"?