Hi fellow investors.
New to the website and this blog. PPOR is Sydney and I’m looking at Muswellbrook, Singleton as an investment. Strategy really is to buy well, undertake some quick TLC such as polished floor broads, new kitchen, and/or maybe new bathroom. Rent out asap as a +ve cash flow, or almost +ve.
I’ve taken note of the varying contributors who suggest furnishing is a good idea, as many mine employees are new to area and may not have furniture.
Looking at 3 bed houses, in good areas. I guess I am after the perfect investment, good potential for capital growth and as near to +ve cash flow as possible.
Be keen to hear of anyone’s views on this strategy and my proposed areas.
Best
DavidHello David
I have been investing up in the Hunter since 2003 (mainly Singleton) – I think you have selected 2 great towns but may be a little late with your arrival as prices have gone up over the last 8 years but there still seems to be some room for a bit more of an increase especially if rents continue to climb like they have in the last 3 to 4 months. With regard to your strategy you have to be aware of the areas to avoid in both towns are there are some parts that are considered a bit rough/undesirable and will limit the opportunity for company rental. Furnishing will increase your rental yield but will also limit your potential tenants. You sound as though you are doing some homework I would suggest you take a drive up there and spend a day looking around speaking to the locals – I have always found that informative.
Cheers
Hi David.
Hunter region is so strong, we doorknocked it seeking investment in the hospitality area, Muswellbrook, Singleton, Scone, and planned to enlarge that using extra villas, units or houses. The info which the hospitality sector so kindly shared with us painted a clear picture of a very strong investment area totally dependent on mining. We’re still seeking in the area.
Cheers
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KeyStrategies wrote:Hello DavidHi Michael.
This is great commentary, many thanks. I agree with being in the correct areas. i noted some rather cheap properties and I suspected they wold eb in teh wrong areas. Questions for you if I may : – Are there a lot of company rentals ? What do you think is the potential for the next 20 years, with the infrastructure going into Mining I can't see a downturn – or am I wrong ! Singleton seesm to be cheaper, but a good growth rate from a lower outlay is still growth, I am thinking after the first IPO, we may do another quite quicky.
Would appreciate your comments.
many thanks
DavidI have been investing up in the Hunter since 2003 (mainly Singleton) – I think you have selected 2 great towns but may be a little late with your arrival as prices have gone up over the last 8 years but there still seems to be some room for a bit more of an increase especially if rents continue to climb like they have in the last 3 to 4 months. With regard to your strategy you have to be aware of the areas to avoid in both towns are there are some parts that are considered a bit rough/undesirable and will limit the opportunity for company rental. Furnishing will increase your rental yield but will also limit your potential tenants. You sound as though you are doing some homework I would suggest you take a drive up there and spend a day looking around speaking to the locals – I have always found that informative.
Cheers
Hi David
To answer you questions
"Are there a lot of company rentals?" – I can't tell you – you are best off speaking to the local agents – I have been leasing out my properties to private individuals.
"What is the potential for the next 20 years ?"- Mate how long is a piece of string? I believe there is good long term potential in the area but things change year to year, it will depend on a number of variables including how the mining activity is during that time. I believe the next couple of years will be OK due to the amount of construction work around the area in both the mines and in other civil projects that are around – EG Freeway extension, rail duplication and Shopping centre expansion to name a few.
Do your Homework, buy well and you will do well.
Cheers
Hi David,
I have lived in the Hunter Valley for the last 25 years working in both Singleton and Muswellbrook. I have a Real Estate background and both areas are great investment opportunities.
The mines are going ahead with new leases and major employment. Mt Arthur in Muswellbrook has minining leases for the next 20 years plus and Ashton Coal have approvals. Its going off!
Any investment is going to work but look out for the furnished properties, there are pitfalls. Mining companys only put their guys in new houses with nice furnishings. You also have to consider the vacancy factor with furnished as they are usually shorter leases and a lot of turnover. Maintaining the furnishings, eg. fridge, washer, drier, vacuum etc. can be costly as well.
It depends what you want really, tax advantages etc. New property can be better for that than older renovated property. Bad areas are in all towns and you wont get the reliable class of tenant you require for a money making venture, it may end up costing you without the right insight.
Take time to think about these things and invest wisely.
Cheers, Future WealthAs said, the Hunter valley is a great place and there are many good areas to look at for different reasons, and sometimes new is better than old. An older cheaper property will often be more expensive to run than a newer more expensive property due to the big tax deductionns on a new property.
Hi David I have been investing here since 2005. My particular focus is sad tired old properties that I can renovate and rent. I stick to properties that are smaller in numbers of bedrooms so they can be rented furnished to a single person or a couple of mates that can share together. I do rent furnished and touch wood have not had too many problems. There are still opportunities to do this and my most recent investment post renovation is showing returns of 14%+ furnished. Good luck with your investments
The market in Muswellbrook is on the move now. I've just spoken to my agent there, and he has confirmed that current demand is high and prices are rising. His agency has leased as many properties so far this year as they did all last year. A search on real estate.com confirms that listings are low and prices increaseing. Here are some articlesa from the local newspaper this month…
http://www.muswellbrookchronicle.com.au/news/local/news/general/housing-crisis/2615072.aspxHi David
I live in the Hunter Valley & work at Singleton & have been watching the cost of housing there for quite a few years. The prices in the area are driven solely by mining & they have been increasing rapidly over the past few years. In the past month there has been a change in the industry, the commencement of the carbon tax & other factors have seen employers lay off casual labour & put on hold any new recruitment. I don’t know how much capital gain you will achieve in the next few years, as Michael said the last 8 yrs have been when the prices have risen considerably but there is a high demand for rentals & they are achieving great prices for very average properties. I would recommend getting some knowledge of the town, there are several areas that will be significantly cheaper for very good reason.
All the best
Cathy
I am presently cautiously optimistic with regards to property in these areas. There is potential for positive cash flow by buying near new, furnishing and renting to mining companies. In regards to future growth, while I am sure that good deals can be found if you do the work, a lot depends on future mining activity in the area and the coal price has taken a hammering lately. I am watching with interest what is happening in this area, but prefer to remain on the sidelines for now.
Cheers
KrisPlans to extend the life of Drayton mine south of Muswellbrook to 27 years have just gone on public display.
http://www.muswellbrookchronicle.com.au/story/804724/extension-plans-on-display/?cs=1235
Having just spent a few days up in the Hunter, I did notice a few things: new subdivisions on the south side of Muswellbrook, most of the people that I spoke to who work in Muswellbrook (non-mine related) don't live there (they travel in daily from as far as 1/2 hr away or longer), the rental returns on face value are quite good (just have a look in a few of the agents windows/websites. It is still virtually impossible to find a hotel room at short notice ie potential for another provider if you can find a site and finance it (although I did see an approve retirement village site for someone looking for a change of use).
Hi Scott
Yes, Muswellbrook is still a very busy town, quite a lot of development occurring and the mines are humming along. Mount Arthur and Mangoola have both recently hired (not fired) more employees. The local council are also very active, and are doing a good job of giving the town a facelift. The council also has a healthy and improving budget. Martin Rush, the local Mayor, has been a big driver behind an effort to rejuvenate the town, and he was reelected recently by a strong majority.
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