hi everyone!
im a new forum lurker – just found yas and u wont be able to get rid of me! so much info here!
i read everything i can about investing in property as I am well and truely a noob! Im kinda like a sponge at the moment, and im hungry to learn more!
my hubby and i bought a 2br unit in mackay, central QLD 3 years ago and paid $97k. Got it recently valued for $290k. So a big high-5 for that one cos the only renos we did was a full inside paintjob, and we put in a wall dividing the rumpus room and laundry. Wall got done for free by a friend, so it only cost us a couple of tubs of paint. It now collects $290 a week rent.
we are currently in the middle of purchasing a $150k prop in Ceduna, SA, which we plan to reno. contracts and all that jazz being worked out now. we chose there due to the low cost of housing at the moment, and the huge things taking place there over the next couple of years (including two mines opening up 200kms from the town). its currently being rented for $190 a week.
so basically our situation is we are now $270k in debt (includes our car debt), but have $490k worth of prop (maybe more, Ceduna valuation being done on Tues).
But here is my predicament. I would love to purchase another property. Something that doesnt need work, but has a good postive cash flow. But am thinking that I should wait until I finish the renos on the Ceduna prop and the first mine opens in may 2010 – because by then we are hoping (fingers crossed) our house will valuate at another $30k+ over what we paid.
So if you were in our situation … would you hold off buying and start looking in a years time when we have more equity? or use our current 200k equity and purchase now? Because Im only new, I dont want to rush too fast … but at the same time, our equity there isnt working for us!
This is a basic rundown of our income if that helps. Between husband's fulltime job and the two rents being charged on our IPs we take home about $1400 a week (after all taxes and prop management fees), plus more if i happen to work that week. our only rent is $100 a week because our work supplies a home, and we just pay a set % of the rent. so if we have a place unrented at the moment we can afford to keep the payments going without too much fuss.
Im just so hesitant because Im so new to this!!
I cant see a financial planner for another 2 weeks because we live in the middle of nowhere and we arent going to town till then.
Im going to ask the FP what they think in a fortnight's time. But I cant stop thinking about it so thought i would get ur opinions!
Thanks for reading my looong forum post haha
Karen
Hi Karen,
I live in the middle of nowhere too. I'm a half day west of Townsville.Well done with the Mackay property. Good timing. Good luck with the Ceduna property, too. Sounds ok.
Be careful about the advice you get from a FP. I've heard some pretty dodgy advice bandied around by professionals, and I guess FP's are like any other profession, you get good ones and bad ones.
So, what to do. Personally, for me that would depend a bit on how sure you feel about the whole Ceduna mine thing. (hey have you been to their oysterfest?) How will your plan change if these mines don't open? How certain are you that they are going ahead? What are they mining? Some mineral industries are more affected by the current GFC than others.
Next to consider. Where are you going to purchase next and how well do you know the market. Are you ready to recognise a great deal? If you are well enough informed to know a really great deal when you see one, then i would start thinking about being able to react when one comes along. This may mean pre arranging finance if you can. I've been watching and waiting and I just don't think, in my market, that there is enough value there yet for me to jump in.
So, if you feel very secure about the Ceduna mine thing, very well informed, and a great opportunity to purchase another cash flow positive property crops up, why wouldn't you jump in? If you feel uncertain about the future of the Ceduna mines, and you don't feel terribly well informed, then why take a risk and jump in now? Wait until the cards are right enough that you feel comfortable with the risk.
'
goodl luck
sthanks for replying!
i am very confident about the ceduna situation. because it is only my 2nd IP i spent countless hours learning about the demographics of the town, the future plannings, its infrastructure. i spoke to the mining companies directly, the real estate agents in the town, the media and also some of the general townspeople. theres been alot of new housing going up at the moment too, so something is brewing.
one of the mines is definitely 100% going ahead. Here is the info about the Jacintha-Ambrosia mine site. Ive rung up Iluku mining company and spoken to them about the housing situation for their staff and contractors. they are offering on site quarters for staff, but anyone wanting to relocate their family will have to get their own housing in Ceduna. also, itll be a fly in/fly out arrangement … so if people dont have anywhere to call 'home' except for the minesite for the years they work there they may rent out their own home near the sea so they can enjoy their days off. The only way to get to and from the mine is through Ceduna. with 250 staff during construction, the 120 for the operations all u have to do is the math …. they are already struggling for housing in Ceduna with there currently being only 4 available rental props in total. with all the newcombers rentals will be even harder to get.
the Minotaur Kaolin mine is still in study-phase, so that one is still a maybe.
there is also a $36 million hospital redevelopment and a $40 million port upgrade.
all this in a 3500 population coastal town.
The next IP I would like to get is a large house in Mackay. I grew up in Mackay and that is where my unit is. I now live in a mining town 2 hrs from mackay, where the whole town is reliant on the mines. if my husband loses his job then we need to move back to Mackay. so if we have an IP there that I would be comfortable living in it would provide me with peace of mind.
so what im thinking of (and ive already started looking in case something irresistable turns up) is a 3 or 4 bedroom that needs a bit of TLC. a house i can fit my family in. ive found one but its listed price is $40k above what I would want to spend. and i severely doubt they would come down that much. but ive asked to look through it next week anyways cos i dont ever want to not be looking out for IPs. whether im wanting to buy or not. keep an eye on the market and see what is selling and what isnt.
I only came up with that idea today – buying an IP that we could live in if the mines fail. once i thought of that it pretty much convinced me to purchase another one. in this climate u can never be too careful. especially when the company ur husband works for rents the house … not us!
Just be careful with Ceduna, to find out where the fly in fly out will go to. It may not go to the closest town. If the mines have trouble sourcing labour, because of the small town and limited housing there, fly in fly out may travel to a larger town.
All sounds good, so long as you are well researched, well informed, and making a careful, knowledgeable decision. I wouldn't rush in purchasing in the Mackay area at the moment. I'd imagine it is much like Townsville, and only just starting to hurt from layoffs etc. Personally, I think there is more pain to come in the Townsville market, and can only imagine the same might apply to Mackay. Last time I looked at Mackay it was more overpriced than Townsville even!
good luck
yeah its not a good market at the moment in mackay. im just watching the market so i can tell when things are changing .. and also keeping on the ball in case something spectacularly cheap manages to find its way on the market
im not rushing into anything, just enjoying learning about RE and investing. reading anything i can get my hands onto
im not rushing into anything, just enjoying learning about RE and investing. reading anything i can get my hands ontoYou must be logged in to reply to this topic. If you don't have an account, you can register here.
