Forum Replies Created
no you dont, they (in 90% of cases) dont even have the listings. <moderator: edit>
shoooshoo wrote:hi guys i heard that dalby has 200 vacant house & land packages that they cant rent because they flooded the maket, is this true?Hi Shooshoo,
There is a lot of land on the market in Dalby, as well as 97 advertised rentals on realestate.com.au
Here’s the land sales for the previous years:
2008 = 195
2009 = 176
2010 = 145
2011 = 15 so far recordedthis would suggest that a large amount of new homes could be available, however just not on the market for rent due to this crisis. Im not saying that there are 200 homes available but even 100 homes for a town that size is a lot of properties to be available for rent.
Shooshoo i would be staying out of the Surat Basin. I really don’t think it is all it is cracked up to being. It is situations like this that you mentioned where investors take marketing firms at face value who are only trying to line their own pockets and never wanting repeat or referral business and they then come unstuck as they aren’t telling the purchaser that the only limit to the number of houses they will build in the area is how many they can sell.
I would be sticking to the Bowen basin still, chase stability, and longevity in your investment. Unless you can afford to potentially have a property that fluctuates in value all the time as well as run the risk that it may be empty in 5 years time then keep to some key areas. Places where long term work forces will stay for the lifestyle as well.
You need to think of the family model. If a town can sustain a family model, that is education (including further education), work & lifestyle, then the region will grow and prosper, especially in the next 10-20 years in QLD as south east QLD struggles to provide infrastructure, and a lot of the new jobs and government infrastructure moves to regional QLD. If areas can ONLY provide work, people don’t stay, and that makes for an unhealthy investment be it property or business.
Look for areas where large companies are going which indicates longevity. Companies as in Woolworths, Stocklands & Lend Lease etc. In Emerald there is a $120m woolworths shopping complex being constructed, this is their second supermarket in Emerald. Harvey Norman are going in etc. In Mackay, they are nearly doubling the main shopping complex (Canelands) from 39,000 sqm to 70,000 sqm including Myer. West Gladstone is having a new Woolworths complex being built at the front of a new estate. Amidst such an abysmal retail environment, these companies are investing there money in these areas. They conduct a more in depth due-diligence than any residential property investor ever will in my opinion. These companies don’t make money overnight, it takes them years before some of these stores will see profit, hence they are there for the long term and they are not there on a gamble.
Again, personally, I would not invest in the Surat Basin. Any company that is renting out furnished accommodation on a large scale is not there to stay. I am talking from years of experience investing in mining areas here, I am not saying any of this light heartedly.
What happens if your property all of a sudden sits empty in 4/5 years time, remember your not the only one thinking of investing in these areas. You may have had all the capital growth in the world in the short term but if it goes empty, you wont be able to sell it, your capital gain is gone and you are still paying interest on $400,000. Your leverage to borrow more has just been reduced significantly whilst you burn $30,000 cash every year on a vacant property.
Ultimately the choice is yours, however, I know where I’m putting my money in the years to come.
Hi everyone,
New blog posted on Chinchilla & Wandoan.
Off to Mackay tomorow and to see Bowen, Mooranbah & Dysart
Thanks for following everyone!
katmat wrote:Josh,
I’m loving the info you are providing! Seems you are getting a heap of interested followers!
Am also close to buying and after reading a lot about the pitfalls of investing in areas that you are not 100 percent familiar with, can really get you burnt! I have only briefly had a look at your website but what exactly does your company provide that can reduce these concerns?
P.S keep going as I am keen to know what other areas you will be visiting.
KatHi Kat,
Thanks for following, its been great the amount of people that are contacting me for advice just from this! I didn’t expect such a following.
Investing anywhere you dont live can seem like a daunting task I agree, however if you have the right people around you to alleviate the pressures off you as the investor it can be a lot easier and fruitful. After years of successfully investing in mining regions as well as being in real estate sales, I found that most investors where going direct tot he agent and having the wool pulled over their eyes as they didn’t know the areas and trusted the agents advice even though the agent worked for the vendor! Through my years of developing relationships in the investing and construction industry I formed my own company where I source quality, new investment properties where I then assess them against my due-diligence on the region and make sure that they are a good investment. From there if I think they are good I have a large base of clients that come to me for quality investments and I put them forward to them with full cost analysis’ etc.
When a client buys through us we provide project management, it was a part of the business that I really wanted to implement to differentiate us from our competitors as many of them sell you a package and then leave you to deal with the builder. We inspect all of our properties for our clients regularly.
We don’t sell properties where we don’t invest personally, so we know they area and the market and we research its potentials and its pitfalls. Whereas many of our competitors have only been to the place they are selling once or twice, just proving that they don’t look after the daunting build process for their clients.
I hope this answers your question, feel free to ask away Kat
Regards,
shoooshoo wrote:hey guys better read below anyone investing in Moranbah/Dysart about Fly-in-Fly-out minershere is a portion of the article:
For those who own property – or are planning to – in locations where mining matters a lot I’d suggest you forget about the carbon tax rhetoric and concern yourself with other issues.
The greatest risk to the economic health of mining towns is the rising tide of fly-in fly-out workers. The more the mining company uses FIFO staff, the less likely the local town is to thrive from the presence of a resources operation.
Soon after Julia Gillard made her July 10 announcement of the details of the climate change tax policy, there was a significant news story that got lost amid all the carbon tax hysteria.
BHP Billiton – via the BHP Billiton Mitsubishi Alliance (BMA), which owns significant coalmines in central Queensland – applied to the Queensland government to allow a 100 per cent fly-in fly-out workforce at its Caval Ridge mine near Moranbah.
Under current government policies, a mining company is allowed only a proportion of its workforce as FIFO workers; 30 per cent must be local employees.
However, under BMA’s proposal, 150 workers will commute to the mine, 200km southwest of Mackay…
What are your thoughts guys?
Once again Shooshoo, I love it, I’m not even going to say that its what I’ve been saying for years (there i said it!). We need to focus on regional areas that get the fly in fly out workers living there. In towns like Macky and Emerald (sorry to come back to them) there are massive shopping centre and lifestyle developments occurring which attracts a family model to an area and can sustain it well.
Fly in and fly out is inevitable, and i personally dont think they will be allowed to do 100%, they can apply all they want but the Government doesnt have to let them.
If you look at the cost of flights in these areas, you will realise that the mines are paying big dollars to even fly them in and out. What they prefer to do is bus in and bus out, that is a lot more economical. Regions where people want to live and still work in the mines will benefit the most, that is, Emerald & Mackay and Townsville to some extent although still a bit far for bus in and bus out. In these towns the mines will subsidise a portion of rent, they wont pay thousands of dollars a week to put 4 men in a house, instead they will pay say $15,000 on top of a salary for the miner to pay their rent if they live in a local area with their family and the mine can then bus in and bus out for their shifts. or like BMA do currently, they give $60,000 towards a mortgage to every miner who buys a house in Emerald and signs a 5 year contract with them. Smart if you ask me. This all means that house prices will rise above average and so will rents, yet they will still remain affordable and relative to the area they are in.
Its the intricate details like this I believe that will make or break an investors decision in the coming years. Also we need to realise that the flow on effect of this mining boom will provide hundreds of thousands of jobs right throughout QLD, so south east will also provide security and capital gains in the coming years, just not the rents and as much capital gain i believe.
shoooshoo wrote:interesting just read Terry Ryder’s article in the Australian about the regional towns to benefit from the resource boom, compared to QLD’s capital cities:Shooshoo,
Thanks for sharing that, re confirms what I have been saying and in fact doing which is great to know I am not alone as I get a lot of flack from people telling me I am crazy to sell and recommend outside of a capital city.
The best thing investors can do from this is to now educate themselves properly on what will provide long term stable growth amidst this boom. before everyone goes in awe of Roma’s CG, please realise that he is talking median sales price. A lot of new homes have been built in Roma over the last 6 years in Roma so the example of CG being 100% i think is a bit flawed, I do agree with the example of median sales prices being 100% however. In saying that, significant capital gains have still been made and no doubt better than most of QLD.
Emerald has always been great for me, ive been investing there for years! To me, Mackay and Emerald will do great out of this in the short, medium and long term for reasons that you will see explained in my coming blogs. Gladstone will experience growth in the short term however there are so many variables to consider, returns could be great buy buyer beware is all I say.
There seems to be some smaller towns along the way to watch also… I am still more comfortable with Emerald & Mackay currently hence why that is the only place I have invested and recommend to my clients. This may change as factors either change or are confirmed to me.
Thanks for sharing, that’s the stuff that should be on this thread!
Rod & Shooshoo,
I have a lot of information to go through and decipher about Chinchilla. I would not go and rush to buy anything there yet, I don’t have good news for you about Chinchilla I am sorry. Again, my opinion however it is a lot more factual than other people out there and facts are the only way to.
Unfortunately people are relating the Coal Seam Gas industries with the Coal Industries. It is important to note that these industries are VERY different. Coal mining is a lot more labour intensive in both the short and long term. I will do an entire study on this also. My objective is to bring clarity into what is happening in the mining industry and how it will affect regional QLD and its property markets.
will update soon for you both
Thanks
Gladstone blog finally posted ( http://ppiqldtour.blogspot.com ), its a long read but well worth it I believe. It is too long to post here unfortunately and has a couple of graphs that are important to the summary.
In short I have touched on:
– Projects and their current status
– Construction workforce population graphs
– Current property market
– Potential property prices
– Potential Rents
– Risks
– Pro’s & Con’sI hope this information is helpful, I will be posting on a lot more regions/towns so do follow. This type of information has not been analysed in this way before, well not that is readily available or unbiased anyway.
Feel free to leave comments on the blog, on here or for questions you are welcome to email and I will respond at my earliest convenience.
Many thanks
Hi Everyone,
I have been working on my final analysis of the CSG industries including Gladstone, Chinchilla etc. Some very interesting findings. Whenever I research an area I go through every companies EIS (Environmental Impact Statement). They are between 1000 – 10,000 pages each so it takes time to search them all for the information I need. I would say I am about 2 hours away from posting my lengthy findings and research. It will be worth the wait!
Thanks for following everyone. Once I have posted on Gladstone and Chinchilla I will respond to everyone’s questions so far. Then off to Mackay, Moranbah and Dysart this week.
you can run the risk but it is in no way worth it. All the properties that our clients buy through a SMSF do so through a leading firm on the Sunshine Coast who manages 500 SMSF’s. With their experience they plain and simply say it cannot be done legally. You forego not having to pay GCT or tax on rental income. It is not worth it at all.
If they are renting at market value why do they need to rent yours?
Hi jassouth
All investments and transactions through a SMSF must be made at what the ATO classify as an “arms length transaction”. That is you cannot buy from yourself or anyone related, rent to yourself or to anyone related or sell to yourself or anyone related. If you do, you run a very high risk of forgoing the minimised tax that comes with having a SMSF.
Due to such large tax concessions applying to a SMSF the government want to make sure that everything is done at standard market levels. To ensure thus they have plain and simply said everything must be at arms length, no exceptions.
Hope this helps
GLADSTONE CENTRAL QUEENSLAND…..
Okay here’s what I think of Gladstone… Prices are a bit everywhere at face value (realestate.com, agents etc) which is synonymous with many regional centers in QLD. However when you dig that bit deeper you can see the consistency.
There are a few areas of interest:
1. Barney point and South: I looked at two blocks there yesterday. One had just sold, it was approved for 4 x 3 bedroom units. It sold for 410k and still had 100k of headworks to pay! That’s nearly the same price I can buy a house block in other towns for which will receive great growth also. What greeted me immediately in Barney point was a group of locals drinking on the beach at 1pm! The council still own a lot of land obviously as they had commission housing in the area.
I think it’s a great place for High density units (a lot of it is classified as high density already) however for houses I think that people will continue out west in the newer estates with all the new services and shops etc. The only agent that said that the demographics are changing in Barney point is a guy who owns a house there. None the less, in the long term I think Barney point demographics could change.
2. CBD: There are a lot of 2 bedroom units in 4/5 story buildigns being constructed with high volumes of sales around the $450,000 mark furnished. Rental returns of approx $650- low $700 are the estimates for these new ones. There are many more approved sites for developments like these and another 4 in council currently at an advanced stage.
Western suburbs: this is where all the new estates are and are still going, a new woolworths is going right on the edge of town also. The shopping out there is good (approx 10 mins drive from CBD) however if you don’t work in the CBD you don’t need to come in to it all the time. New house and land starts at $500,000 however the standards of these homes are very poor in my opinion. It seems to be around the $550,000 range for a good package which is Val/ market value still. Many people who are spruikng the $500k packages are saying you are getting it for $50,000 less. You’re just getting $50,000 of less house and or land. A $550,000 house will achieve approx $650 per week rent currently, whilst furnishing it seems to be the way to go and achieving $800-$1000. Even up to $1200 if you want to get creative and spend another $50,000 – $ 70,000. some builders are really bad! Especially Vantage homes, they are terrible here and even the real estate agents here warn against them. I feel sorry for the people that have bought some homes based on hype, when they need to resell on the local market the agents don’t even like the house so what hope do they have to get the best return!
I am concerned about the construction workforce still. It has always been my concern and it still is to be honest. In 5 years many employees may not be here. CSG has a very large construction workforce and a significantly lower long term workforce. And the reality is that a lot of people here are a construction workforce. Gladstone has had many peaks and troughs in history as influxes of construction workforces has coke and gone. However, of course it has always gone up in the long term.
There is a lot more land coming on the market, there are currently 4 large unit sites (40+) for public comment with council. I don’t have a doubt they will all rent out. But in 5 years? I don’t know and I don’t think I trust it yet personally for a long term hold. Land has risen from $180,000 last year to $250-$280 currently. The main shortage or residential land is NOW. Which means that land prices could be at or near their ceiling.The mining companies won’t currently rent a house that is older than 5 or 6 years. This is the first time I have seen this as it seems to be unique with the Coal Seam Gas industries. I was also interested in buying an old house and subdividing the block and battle axing. However with strict council zoning for smaller developments this seems harder than previously thought. In light of this, not all rents will soar, only new houses or units. Yes I am sure they will all go up, but it won’t be port headland where you buy a 3 bedroom dump and rent it out for $1000 +. this seems to only come with the new properties.
coalstar wrote:if you buy house and land, furnish it, get a company lease for two years and you’ll get approx $800 a week in rentEven more now coalstar. Apparently at $1000 (an agent rented three out this week). This makes a 9% return in most cases with today’s market value
Actually the historic trend is 10 years not 7. It has doubled in 7 years once in the past which is why people say 7 to 10 years. It has not and is never expected to double every 7 years. Well that’s what educated property investors knwow anyway because as you can see the difference is substantial.
hbbehrendorff wrote:How could you go wrong Investing in Dysart ??????As you should well know by now (if your an educated and experienced property invester) property doubles every 7-10 years
So if you buy a 500k dog kennel today, your property will be worth approx : $32,500,433.65 in 40 years !!! WOW
SEE HOW YOU HAVE BUILT 32 MILLION DOLLARS OF EQUITY FROM JUST 1 INVESTMENT PROPERTY ???
all you have to do is jump on the gravy train and the wealth will flow to you
In 40 years at a 10% rental return that equals $61, 538 a week in RENT !!!! wow
With the current Qld wage today being about $63,840.00 if there is 3% inflation every year, the average wage in 2051 will be say $306,497.16
That means your property will be worth 106 times average wages ! See how easy building wealth really is with property investment ?
Ummm…No I don’t see how you create 32 million dollars of equity. Could you explain further perhaps?
jamesw82 wrote:How did you go in gladstone mate, anything intersting you stumbled across? Should we rush in and buy investments there?I had to come home (only 4.5hrs away) for a couple of days. and will be going back leaving at 5:30 tomorrow morning. A big blog will come on Saturday I will promise you all that. Along with photos and all!
The H&L packages i cannot get my head around, I guess like everywhere there are companies advertising them with prices all over the place however they differ by 100k here for the same size house pretty much. Gladstone has risen dramatically this year. However it seems more land will come onto the market by the end of the year and even more next year. There are a lot of subdivisions in council presently.
rent for a 550k house is approx $630-$650 per week
Wow no estate land in Gladstone available to investors. Only a select number of blocks for owner occupiers where a legally binding declaration must be made that you are one! This looks like it will change and i have learnt that an estimated 9000 blocks will be released over the next ten years. Well this is councils prediction anyway.
House prices vary when it comes to the 4 bedroom home, I have some meetings tomorrow which will help me work this out as to why.
StevieC wrote:Hi Josh,you are doing what I'd love to be doing myself if I had the time. I've been thinking about investing in either the Bowen Basin or Surat Valley now for almost a year and I'm ready to do something. There are possibilities for buying properties off the plan in Middlemount and Dysart that would give a 10 to 11% rental yield. The only draw back is that there is a body corporate.
The development in Dysart is for 24 appartments.Which do you think is the best investment location in these regions? In Surat Basin I've been investigating Roma and Chinchilla. Roma has a better rental yield but some people are saying Chinchilla has much more potential for capital growth.
In your opinion, which is the best location to buy in either the Surat or Bowen Basin areas taking both rental yield and capital growth into account? It seems that the Surat Basin has much more potential for capital growth than the Bowen Basin. One thing that has made me a bit reluctant to invest in property at this time is the belief that we face a major stock market crash before the end of the year. If that happened, I'm wondering how that would affect investments in these regions.Steve
Hi Steve,
I love regional Qld, i have lived there before and there are just so many opportunities! My first question is are you after capital growth or rental yields? if you had to choose which one would it be? Also what is your time frame for holding a property are you thinking?
minichick wrote:I would wait and see if the carbon tax goes through before investing in any mining area atmhow is the carbon tax going to impact coal mining exports?
jamesw82 wrote:na ill keep the coast one for a bit longer, its doing alright. So josh u prefer emerald more so then Dysart? A safer bet maybe. Im looking for a rental yield of around 7% not getting to fussy haha. Im very new to this game, i just want early retirement,am currently living and working in Mt Isa and am very over it and want to get back to the coast haha. Real estate is my get out card.James, Yes i have a lot of properties there and my company gets bulk deals with local builders and developers (although no land available right now for the public) which we then sell to our clients. If you’re interested in my research/experience in the area and what I have for investors there PM me.
No stress but thought I would put the offer there for you. Emerald services a lot of the CQ mining industries and will also benefit from Galillee basin developments int he coming years. Harvey Norman is opening up there, Bunnings looking for a site still. Woolworths building a $120m shopping complex with a 2hectare big W in it! It is further becoming the regional hub of the Central Highlands and will boom in my opinion.
Cheers
