Cash Flow Mining Towns

Hi All,

I am currently looking at investing in areas such as Dysart, Blackwater, Gladstone, or South Hedland. Obviously these towns have great cash flow, my only concern is weather there will be any capital growth. I know this is impossible to forecast, but as I'm investing for strong cash flow, and wanting to hold for mid to long term, I suppose as long as the rental demand is strong, and the price stays steady it should not be much of an issue.

I have finance of $1.1mil organized, how would you guys invest? To invest in 2 or 3 properties ($350k), or 1 property in the $900k range with rental returns of $3000 per week. Any thoughts to how you would progress, would be much appreciated.

Sean.

I would snap up 2 4x2's in Gladstone for 550k a piece and reap the rewards.
Prices there are heading north quickly

Gladstone has had its boom, once the construction is done the work force is gone. I have been investing in solid mining towns for nearly a decade including Emerald, Mt Isa, Blackwater, Dysart and Moronbah.

Capital Gains have always been there plus the great cash flow. People who say there isn't any Capital Gains are the ones too scared to go Central Qld and stick to their Capital Cities. The mines in these areas will keep going for years where as Gladstone is relying on the construction of the port.

Buy as many as possible, always spread your risk rather then one larger one.

Gladstone is only getting started

I agree MAQ.  Stage 1 of the boom in Gladstone may be over, but stage 2 and 3 are on the way over the course of the next 5 years.

1 Key event in stage 2 will be the construction and operation of Wiggins Island Export Terminal which will be servicing the Surat Basin.  Agreed that during the construction phase population peaks, but the operational staff will still be there in significant numbers.
Purely my perception and opinion but I see Gladstone evolving in similar fashion to Mackay, the initial expansion relates directly to mining but after that hundreds od small businesses open up providing support to mining from a coastal base.

I could be wrong, as I have been many times before, good thing is I keep learning.

kind regards

Shane

Current committed projects in Gladstone in the next 4-5 years are worth $88 billion.

They will have a peak construction workforce of an extra 15,000 workers, with an operational workforce of 4,500 for current committed projects. They are constructing temporary accommodation for approximately 10,000 of the construction workers.

The major LNG projects have additional trains planned, but not yet committed to, which will see the peak construction workforce maintained for around 10 years. This will see the concurrent additional workforce after the current committed projects at around 19,500.

Add additional projects which are now being announced on a regular basis, with a state government happily agreeing to any companies wanting to set up in the industrial hub of Queensland, with a deepwater port and unlimited power generation capacity and it is a huge opportunity still.

Hi Guys,

I'm just starting to look at Gladstone with a view to a investing in a house. What suburbs would be your focus? The pure focus is capital growth with a reasonable rent return

Any help would be much appreciated at this early stage

Ant

with those factors in mind, i'd probably prefer not to invest in gladstone but in areas with consistent and expected long-term mining operations

Hi Sean,

Terry Ryder has just updated his Port hedland Hotspotting Report.

Link http://www.hotspotting.com.au/report/108-port-hedland

Note cost is $30 - but it is independent and may be of use to you.

Edit (insertion) - he also has reports for the Q;ld basins which may help you do some comparisons between your preferences.

Derek
North Perth Project coming up - est +$92K profit & rent returns ~9%+ - http://tinyurl.com/7untpjy
derek@eosproperty.com.au | www.eosproperty.com.au | 1300 558 114

Hi Ant

Really depends what your budget is. Gladstone is getting up there a little in price now. Still a VERY good place to invest though with plenty more potential for growth.
Rent returns are very strong. $500,000 purchase price will get you around $650pw, so the numbers are good.
There is a lot more going on there than people realize and I think it probably has 5 strong years then will start to level out a bit, but it is a growing city and could do a lot better than people think.
Mackay is a good place to look at too, it is probably 18 months behind Gladstone price wise, but has got some very strong reasons why you would buy there also.
PM me if you want any more info.

Anthony Soole
anthony@pistore.com.au
0419 044 472 - www.propertyinvestmentstore.com.au