I notice a lot of people have the majority of there cash flow positive properties in mining towns which are currently enjoying the resource boom. My question is what happens in a slow down. Can this happen. What if mines close down and prices drop and renters leave. This has happened in the past. Do people have a exit stratagy.I ask this because my family roots are in broken hill and my grandfarther worked in mines from 15 until retirement. The closing down of the mines knocked broken hill for six and this can happen anywhere. I know the hill is improving now but it been a long time. What are your thoughts.
Surely some one has a opinion on this. Is anyone concerned about this or do you all have exit strategys.
Hi there devo76, My husband and I live in a mining town, Glenden, QLD, purpose built by the mine. There are people who live here and who bought houses pre-boom for 20K, approx 7 years ago and now I see several houses about the community for sale. They are wanting 350K+ for these homes. These people are trying to cash in now. When I speak to anyone in our community about buying a house here, it is seen as something that most would never do, too great a risk now, the same feeling of 'What happens when the mine finishes, boom ends? Then what…ghost town!' In saying this, a young guy, builder from Mackay, has just bought a piece of land down the road and has just put 5 portable homes on it. There is a waiting list of people for houses in our community, however I personally would not purchase a home here now…exiting now would be great with returns like mentioned above.
Just talking to our broker the other day and he has a client who owns 6 properties in Blackwater, west of Rockhampton, some part of the mine has just closed and men were layed off and this guy has 3 of these properties vacant and he bought 2 of them for well over the 350K mark. Perhaps a little dicy having all your eggs in the one basket but everyones approach is unique right.
Funny enough, my grandfather worked in the Mine in Mount Morgan and for the past 40 years the town has been a sleepy town with heritage tours of the mine and not alot else. Apparently, there is some talk of the mine reopening?????????
Of course slow downs in mining communities can and will happen, its like the property market, I think you just need to know when is the right time to exit, depending on when you bought into it.
If I had a property out here and I bought it for 20K and had a rental return of $700 pw, don't think I would be selling right now anyway!
Warm regards, Cresta76This is what i thought. If you got in early then you are laughing but you have to be careful now paying top dollar for houses in mining towns.
Agree completely…interesting though and good on those that have profited from the resource BOOM in QLD!!! That's what it is all about right? Where to next??????? Check out Tassie, Rosebury and Queentown, lots of mining interest down there at the moment, cheap houses (40-80K) with rental returns between ($80-$150 per week) ….new hospital in Queenstown….worth a look????? Know of an fellow investor who just purchased 3 cheapies in these two areas and is just going to hold them for 6-12mths, rents are covering everything….sounds like positive cash flow to me! Ok, warm regards, Cheers.
You must be logged in to reply to this topic. If you don't have an account, you can register here.
