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Hi all,
With regards to investing in mining towns there are a couple of key considerations that should have you minimizing the risks and maximize your returns, maybe providing some clarity for “have I invested in the right place”:
1. Consider your investment property timeline. For the single resourced, single company type areas, your risk is higher so your exit strategy should be sooner. Try get in early to maximize your gain and don’t be too greedy. If the research shows you have missed the boat, don’t enter and help someone before you realize their gains.
2. Understand a mining town without tourism or other local industries feeding the demand for residents and employment within the town have a limited life beyond the mining effect and its property cycle.
3. Try to invest in mining areas with more than one resource being mined or processed. This can shield you from global price fluctuations and economic changes from countries being supplied one resource over another.
4. Try to invest in mining areas with more than one company committed to mining or processing the resource. This can shield you from the financial stability of one company over another, and governmental changes in policy or union movements effecting one company over another as we have seen happening in Dysart and Moranbah.
5. Understand an area nearby new mining project infrastructure commitment will have the least positive effect on the local area market compared with the actual area of mining investment.
6. Additionally to point 5, the area nearby a town with the new project commitments will have the effect diminish sooner than the actual area of mining investment.There are areas you can invest in that tick all of the above points, and some areas tick some of the above points. Remembering there is no perfect investment location, but only a current location that the research and statistics today show might return better than average performances over time.
The fact you all are in this forum shows a level of desire conducive to a better life over those reading what is happening in the life of The Kardashians for example.
Happy investing.
Hi Kouts, Have to agree with Anthony here. Gladstone region is the place to go based on the market indicators. I would add one aspect to the three he suggests. Current rental returns being achieved through these 3 factors in the area you looking in. An area may have all 3 factors but currently achieving 3-6% yields like most areas we have in Vic, and the rest of Australia. But in Gladstone, the 3 factors are there in spades, and currently the rental income goes a long way to covering the holdings costs. If your going to invest, why not seek the area where the tenant and taxman pays the majority of your investments holding costs as your property grows in value?<moderator: delete advertising>
Hi fellow investors, Not sure if this has been asked recently in this post, but what is the general perception here on Student Housing? I have read a few previous posts from 2009, some positive and some negative. But I am interested in current 2011 opinion.
I personally own 4 x CF Student Housing investments properties, bought keeping the following principles:
1. FIRB status in the building that allows me to resell to foreign purchasers in the future (opens my re sale market).
2. Units can allow Owner/Occupation for owners family members who are students (opens my re sale market, these buyers are plentiful, buying to place their kids in the property).
3. Good Yield 8% or higher.
4. Higher than normal refurbishment fund contributions (keep the property maintained).
5. 70 LVR or higher lending from the banks (they don't like <50m2 units, but you can find lending if you look hard).
6. Reputable manager (I do prefer Unilodge and have had a good experience with them).
7. Located within walking distance to Unis.I didn't buy them for Capital Growth, I just want someone else to pay off my properties over time. You can own unlimited CF properties as long as the rental increase is in line with the rate rises. These supplement a balanced portfolio. Wishing everyone a good 2011.
Doug.
