Hi Team feelin bit blue …bought first SMSF IP in mining town ….looking for words of wisdom. encouragement, anecdotes to lift my spirits & get on with my goals. Should I hold, had it 4 2.5 yrs currently tenanted excellent PM?
Should you hold? consider the future of the particular mineral, workforce requirements, is there an excess or deficiency of housing. Reserves of mineral etc etc. Is thereanything elseabout the town?
I’ve got an industrial investment in a mining town. Value has probably gone down 20% in last 3 or 4 years. On the other hand it’s still worth double what I paid 11 years ago and is yielding 10% on about 70% occupancy. 3 major minerals mined in the area. Future growth of town probably low.
Hi there – sorry to hear that (investing in a mining town that is).
What is the current market value v purchase price? being tenanted is great! however, do you have a borrowing attached?
Depending on the state, the town will driven by certain companies in the area, review the financials/ prospects and determine what the future holds? most likely will not be positive but lets hope its positive for you.
Cheers, Ivan
Redwood | REDWOOD | SMSF | PROPERTY | FINANCE
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Would you buy that property today at it’s current price? If the answer is no, then why would you continue holding it, other than the emotional pain of admitting failure? Psychologically, you’ll make a better decision if you can consider the loss in value as money that is gone forever. Otherwise, you’ll be tempted to hold onto it in hopes of a recovery, which would amount to little more than speculation.
Jason Staggers | JasonStaggers.com
http://jasonstaggers.com
Email MeWould you buy that property today at it’s current price? If the answer is no, then why would you continue holding it, other than the emotional pain of admitting failure? Psychologically, you’ll make a better decision if you can consider the loss in value as money that is gone forever. Otherwise, you’ll be tempted to hold onto it in hopes of a recovery, which would amount to little more than speculation.
This is a great way of looking at all investments – if you wouldn’t buy them now, why continue to hold them?
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
Corey/Jason,
Because there are non recoverable costs involved in selling/buying real estate.
I don’t know why everyone is so freaked out about mining, its a temporary issue, yes you paid too much but mining will come back, unless they discover a way to get minerals out of the ground without people (robots….but you’ll still need robot mechanics) then eventually China will start buying again.
If you have the ability to service the debt have you considered picking up a few bargains in the same town eg to use the same PM in order to average down your costs?
Like CRJ said above…..in 10 years from now will it matter….the only time it matters is when you are unable to service the debt and get wiped out……even then only matters if you cant start again before you die.
If you have the ability to service the debt have you considered picking up a few bargains in the same town eg to use the same PM in order to average down your costs?
NAB lowering their LVR requirements for mining town purchases could be seen as a bearish sign. I’d say downside risk remains. But for anyone who disagreed, they may answer “yes” to “Would you buy that property today at it’s current price?” in which case holding would fit their opinion on the market. My point is hold because you have a strong reason for a bullish outlook, not because your ego can’t handle admitting failure. My experience mentoring mining town investors has taught me that most continue to hold for the latter reason.
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This reply was modified 9 years ago by
Jason Staggers.
Jason Staggers | JasonStaggers.com
http://jasonstaggers.com
Email Mewell, i bought into mining town in QLD in May 2015, wait 2 mths to rent out after slashing the rental.
well, i bought into mining town in QLD in May 2015, wait 2 mths to rent out after slashing the rental.
If rents are still sliding, that means values are still falling. Thanks for adding to the conversation Yson.
Jason Staggers | JasonStaggers.com
http://jasonstaggers.com
Email MeHi guys ,
If its cashflow +
Have you considered using the cash flow to pay it down thus reducing the risk and losses?
Or are you in way over its value?Luke Taylor | Hope Property Investing
http://hopepropertyinvesting.com
Email MeProperty Support,Strategist and Buyers Agent
I bought in a mining town, my first IP in Aus. What a mistake that was! I have however learned from that mistake, ate some humble pie and moved on. I still own it because even if I offered it for 50% less then what I bought it for there would be no buyers. I’m sure there are more then a few people on this forum who are in my shoes but unfortunately unless your IP is tenanted and returning 10% then it’s unlikely you’ll get any buyers. My guess is that there is about 5 more years of pain before some light at the end of the tunnel. I could of course be wrong, wouldn’t be the first time!
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This reply was modified 9 years ago by
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