Hi all, just wondering what is your opinion in purchasing property in a small town with population of 3000 people in North QLD. Rental yield could up to 10% or more. Active mining site for employment. Price range only $50K -70K. It has all the amenities, like school, shopping centre, library, pub, etc within walking distance and an hour or so drive to beach. An international airport is being constructed about an hour drive from the town.
May I ask the opinion of ‘forum guru’ in term of the chances of potential growth of this property? would this be a type of property that I choose for positive cashflow over capital growth?
Well, I’m not a guru, but from the little info that you can provide without giving the town away it sounds interesting.
If I were you I’d certianly look inyo this further as it may be +ve cashflow now and may have capital gains in the future but it does depend upon a few things I think: Is the mining site the only employment for poeple in the town or are there other types of employment as well? If the mining is the only thing, then what happens if the mine closes? If other things, are there enough other things to substain the town should the mine close? What is the mine’s life expectancy?
The international airport is interesting, could provide lots of possibilites, have you checked with the council whether they have tourism of any kind in mind now or in the future? Is there any accomodation in town for tourists?
The size of the population doesn’t bother me, but I’d try and find out what portion rent and what the vacancy rates are. Is there a real estate agent in town that does property management?
Well, enough from me, you initial post sounds very intruiging, if it was me, I’d investigate further.
Good Luck
PKJulie,
Here’s a couple of questions/comments you might like to think about.
* International airport? Says who? Is it rumour or fact? Look it up on google.com.au “news”. If it isn’t in there, it’s probably rumour.
* How old is the house? Does it need repairs? Structural problems? What is the land value? If you need to do repairs, how will that affect your rental yield?
* How many more years does the precious mineral being mined have left? In some mining towns, the mineral only has a few years left in existence. You can find all of this info on the net.
* One hour from the beach is a long way. It’s hardly coastal.
* Is the premises already tenanted? Have you been told it is market rent, or is the rent comparable with other premises in that location? Sometimes RE agents will tell you a particular rental, but it isn’t the same as the actual rental that can be achieved.If it feels right, and the house is in good nick, and you feel there is potential for the place, and the numbers stack up, why not go for it?
50k is not too much to lose.kay henry
Originally posted by kay henry:50k is not too much to lose.
Black or Red? [satan]
Thank you for your insights, PK and kay henry.
1. I was told about the airport by the seller. But she could not give exact time on when the airport will be completed.
2. The house is 25 years old. Just being repainted about a year ago. Neat condition.
3. I have not find out more about the mining. From what I know, it was not the sole employment. The area is also a cattle raising area which a fair few number of people too.
4. There is public transport to nearest town (Bowen) twice a week. And to go area like Airlie Beach, Mackay there will regular buses from Bowen.
5. The property is owner occupied at the moment. Selling due to bad health.
6. There is only one tiny real estate agent in the town. I have spoken to them, given a range of rental of $100 – $160 per week depending on the ‘quality’ of home. I still reaching for other agent closer to the town to find out more about the possible rental income.This will be the very first investment, so kinda having cold feet about the whole thing and looking for the best way to kick off.
But I would certainly look more into the questions you two have asked as the right questions do lead to the right answer. Well, I am working on ‘the answer’ now [happy3]thanks again
” I have not find out more about the mining. From what I know, it was not the sole employment. The area is also a cattle raising area which a fair few number of people too.”
Thats like the area I was looking at, the RE agent said they had sheep and mining. What he didn’t say was that the mining company owned the sheep and used them to maintain the property (so they didn’t have to pay for the grass to be mowed!).
The sheep had no real economic value at all!!Do more research on employment. And the airport!
Rgds.
Lucifer_auHi lucifer, the area that you are looking at, how about the growth and rental yield?
My advice – buy something closer to home you are more familiar with. Are you investing or gambling?
There is public transport to nearest town (Bowen) twice a week.
Bugger- I would hate to miss that bus!
Maybe you can hitch a ride in a mining truck as it delivers its stuff to a port. But dont worry the locals are really friendly.
Hehe Yack![biggrin]
But then, my designer outfit might become filthy!Filthy designer outfit indeed! tsk! [goatee]
Julie, a 1980 house should be in pretty good nick. Get your solicitor to check the age of the house though. They can do that through Council. If you think the house is older than 25 years, it may have been that the house was relocated to the block of land (I’ve had 1st hand experience of this). A builder can tell you the approximate age of the house if need be.
Make sure you get a building and pest inspection.
And yes, as to your original question, this is a positive CF place, as opposed to a growth place. If that’s what you’re looking for, and the numbers stack up, and there’s a possibility of tenant supply… it could be a fun purchase
kay henry
50k is not too much to lose.
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