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Regional Mining Properties

Discussion in 'Real Estate' started by Chris C, 31st Mar, 2009.

  1. Chris C

    Chris C Well-Known Member

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    2nd Apr, 2008
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    Location:
    Brisbane, QLD
    I was just wondering if anyone on these forums had invested in any regional areas as a result of the mining boom? And what has their experience of their investment been so far?

    Also I was just wondering if anyone had any god information source son how the property market is fairing in many of the mining town (particularly QLD) of late given the GFC and commodity price crash?

    I'd also be interested to hear what people think of the idea of investing into more regional areas to ride off local mining operations...
     
  2. jrc

    jrc Active Member

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    Location:
    Western, NSW
    Don't know Qld specifically. I have lived and invested in a mining town. Main issue is length of life of mines. Mining towns go up and down and can be in the doldrums for a long time. I'm happy investing regionally.

    The town I'm invested in has been good to people who've taken the long term view and buy in the doldrums. If you have bought at the top good luck.
     
  3. Chris C

    Chris C Well-Known Member

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    Location:
    Brisbane, QLD
    Has anyone also had any experience with buying into larger towns in mining regions something equivilent of Emerald in QLD, or even the next size up, Mackay or Rockhampton?
     
  4. islandgirl

    islandgirl Well-Known Member

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    Location:
    Middle of beautiful Moreton Bay, Qld
    I wouldn't touch them at the moment. There is too much uncertainly. Mines are putting extensions on hold and production is scaling back. We rent a heap of properties in the mining area. The rents are starting to go back down.
     
  5. Chris C

    Chris C Well-Known Member

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    I'm not looking at the area in the very short term, I just can't help but feel that in 6 - 12 months time the areas may well be good buying again given I'm expecting quite dramatic prices falls. In addition to that, over the longer term there is 4 - 5 billion people in developing economies that are going to be competeting for a very limited number of global resources, and as such I expect that regional mining towns will be prime places to start a new boom 12 - 24 months from now when demand for resources really picks up again.
     
  6. blingbling81

    blingbling81 Member

    Joined:
    23rd Nov, 2009
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    Location:
    sunshine coast
    well i seem to me the only one then:)

    everyone keeps telling me to keep away from rural towns and stick to cbd and major cities and its hard for me as im just starting out because if i need to ask anyone i cant get help because there against it but im purchising a property in a small town out west as i used to live there so i know the area and people (good tenants) and i know the inferstructure im trying for positive cash flow. ive been watching a few places in regional qld and some towns are outperforming the cities and beach areas depending what ure looking for ive put a contract on a house for $110,000 3 bed 2600sqmtr block now its rented for $160wk with long term tenants which want to stay there for a few more years. to me this is great as it is positive cash flow now the disadvantage is the groth is about 2-3% which isnt much but it gives me the option to buy more because its positive and i will be give me 6-8months and ill buy another one because i can buy 3 for the price of 1 house in the cbd so i have my eggs in different baskets so if 1 isnt performing i can sell and still have 2 also it steps back my risk for interest rate rise because its a low amount and posative cash flow not out of my means to pay for.i already have an IP in gympie rented and its not positive its a bit of both good rental return and capital gains. down the track i will be buying a house to live in as we rent atm but i live on the sunshinecoast and its hard to find a good house at a good price so once i get that it will be for capital gains so i have 2 types of properties as we know capital gains is needed for future deposits, please be honest when you coment as this is my plan and it mite not suit others but im going to try it as it suits me.after all you never learn anything by not trying and if that means doing somthing different then we will see what happens
     
  7. Billv

    Billv Getting there

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    Location:
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    blingbling81

    My opinion is to buy in an area you are familiar with.

    There are people who have 10 regional properties worth 2mill $
    and others who have an equivalent size portfolio with only 1 or 2 properties.

    There is no right or wrong way IMO, just do what works for you.
     
  8. blingbling81

    blingbling81 Member

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    Location:
    sunshine coast
    thanks bill good to hear some positive on the subject:)
     
  9. GregR

    GregR Reid Consultants

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    13th Jul, 2009
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    Location:
    Berwick Vic
    blingbling81,
    There are numerous paths people can take and there is not only one golden path. It depends on your circumstances, your end goals, your time frame.

    Income is important and you seem to be increasing yours which gives you both protection against rising interest rates and will give you the ability to borrow further in future.

    A balanced portfolio has too often been neglected where capital growth and income are both factors to consider. In recent years with available and sometimes cheap funds, people focused too heavily on capital growth and started to rely upon low doc loans to be able to 'show' servicing. this strategy is largely a thing of the past with the tightening credit restrictions, income is king at the moment.

    If you are confident of the area and the tenant demand, go for it. Just make sure you can borrow in that area the LVR that you want.
    Greg