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Hello from the Pilbara

Discussion in 'Introductions' started by rags2riches, 18th Dec, 2011.

  1. rags2riches

    rags2riches New Member

    Joined:
    18th Dec, 2011
    Posts:
    4
    Location:
    Karratha, WA
    Hi to all. I am an "adult apprentice" in the investment area - still in my first year and just in research mode.

    I live and work in Karratha, WA and feel that the property micro climate up here may be hot in more than one way.

    Although property prices are extraordinarily high for a regional area, demand and high rental prices are achieving up to 10% ROI if the statements made by local Real Estate companies is in anyway accurate.

    My task for the next few months is to research this using tools and information I will learn from this site and other sources.

    I have good income potential for the next few years and am looking for an investment/s to take me to the end of my working life, approx 15 years.

    cheers

    Rags (2riches will come).
     
  2. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    Is the 'Two Speed' economy very noticable in Karratha?

    In such a wealthy area, why have you left it to invest at this later stage in your life?



    Johny. :)
     
  3. rags2riches

    rags2riches New Member

    Joined:
    18th Dec, 2011
    Posts:
    4
    Location:
    Karratha, WA
    better late than never?

    Hey Johny,

    not sure what you mean by two speed economy.
    Why have I left it so late to start investing, thats another story on perhaps another website forum...

    I have only lived here for 15 months but have had time to understand that the housing/rental market here is quite different from many parts of Australia.

    The high demand for housing and limited supply plus the high incomes form individual renters and deep pockets of mining companies and others needing to house employees creates the high yields that are advertised by REA's.

    As I said a lot of research still to do to see if entering this market is feasible for me personally but while on a high income its more than just a dream.


    cheers
    R2R
     
  4. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    Hi R2R,

    A two speed economy is where one part of the Australian market is going gangbusters, while another is limping along. Area's of WA are clearly beating SE Queensland where I live. Here, it is possible to buy a two bedroom house for $170K, while $250K would get you a nice 3bed. What are your prices like?



    Johny. :)
     
  5. rags2riches

    rags2riches New Member

    Joined:
    18th Dec, 2011
    Posts:
    4
    Location:
    Karratha, WA
    Hi Johnny,

    Karratha is in the centre of a really booming resources sector with insane numbers being touted about for projects $26,000,000,000 here, $10,000,000,000 there, just starting up in 100km radius of town with dozens of other huge projects all at various stages of development. Labour shortages of 6000 are envisaged just for some of the projects mentioned over the next 3 to 5 years. There is lots of money here and wages are high, people are prepared to pay $400 to $600 a room per week. It is a large FIFO community with accomodation needs. Housing is scarce and even with camps of dongas the rental market is unable to keep up.

    So its not so much a question of how much the house is but what the rental return would yield. IE a $779,000 3 bed house = $1650/week,
    a $1,250,000 4 bed = $2500/w.

    Its one of the few markets that I am aware of that the rental income could cover the mortgage repayments.

    So the question might be...why would you want to own a house in the middle of the Pilbara.

    Given that the resources boom continues in some form or another for the next 10 -20 years you could own the home and on sell it as a company rental and realise a gain within that time frame with your tenants paying the lion's share of the mortgage.

    Karratha is going through a strong growth phase at the mo and the towns amenity is only going to improve from what I see.

    Still putting together some cost models and obviously I may have missed some important points but its fun learning as I go and not costing anything yet :)

    cheers

    r2r
     
  6. Johny_come_lately

    Johny_come_lately Well-Known Member

    Joined:
    1st Jul, 2009
    Posts:
    703
    Location:
    SE Queensland
    What kind of jobs are they lacking in?



    Johny.
     
  7. rags2riches

    rags2riches New Member

    Joined:
    18th Dec, 2011
    Posts:
    4
    Location:
    Karratha, WA
    pretty much any trade or mining related job.

    But any job would have potential - the non resourses sector jobs rates are driven up by the crazy money the FIFO guys get.

    r2r