Just wanted to find out if anyone could think of any major reasons for not investing in old mining towns. I have recently found some +CF places in mining towns and have been told that they have high demand for rental properties as the miners rarely buy in these areas as they often move between mining towns and therefore wouldnt have the need to buy in one area.
Any advice or suggestions on the topic would be greatly appreciated.
Waz11[specs]
g’day waz,
I am a newbie as well and am currently looking in mount isa. I don’t really have an answer to your question but i just wanted to give you some support that someone else out there is also looking in mining towns.
Cheers gav.
Hi waz11,
Mining towns can be either good or bad, you must do detailed research into the life expectancy of the mines that sustain these towns some like Broken Hill are reported to have a very short life spans.
Regards Angus.Very boom and bust… Mines go through big cycles (so when it’s good, it’s good, but when it’s bad, it can be real bad…), and at the moment were on an large upturn, though apart from China the market is quite weak. Don’t make any long term decissions based on the current situation. Also as Angus mentioned see how long the mine life is, as short could mean all your potential/current renters move on…
Rgds.
Lucifer_auI am investing in such areas as a medium term investment (up to 5 years). I have found that if you stick to the closest major town, not the actual mining town and make sure there isnt only one mine, but several and check in the council to find if there are other mines being built over the next few years in the area, then you have found a spot.
I am structuring low cash down deals in areas such as this.
Kev[cigar]
[email protected]Mining towns can be both good and bad at the moment most are offering cash flow positive properties that meet the 11 second rule. Kalgoorlie, Boulder, Collie, Mt Isa, and the list goes on. My only advise is to do your research well. What is the life expectancy of the mines based on the remaining mineral resources in the town. Take into account not only the situation now and in the future but also study the past. Look at Kalgoorlie a few years ago when the gold price was low, houses were cheap and there were many unrented properties. In some of the smaller towns around you are paying for nothing more than a fibro shack.
All the negatives aside some are quite nice houses in larger towns which are leased to the mining companies and offer good returns. The bottom line don’t just buy because they meet the 11 second rule as for any investment do you due dilligence.
Cheers
Just read this thread and thought I would also add that many mining companies are doing a flyin-fly out deal with their employees. They live in other areas to the mine and the company charters a jet for each shift (weekly or whatever).
Just be on the lookout for this occuring in some of the smaller towns as it does happen reguarly.
‘Eat rich food, barbeque a yuppie’ [greedy]
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