Investing in Blackwater & Emerald

Hi Yann,

In researching suburbs to invest in, I always to go:

http://www.domain.com.au/public/apm/default.aspx?mode=research – in the box where it says “search” I will put the postcode in. It gives an overview of demographics, median price, etc.

Trawl the council website. I want to know what the Council leaders, the eldermen/woman, are planning in the short, medium and long-term.

Go through the “for rent” property listing online to find what what an “average” house rents for. Calling the managing agent to get estimates help also but you would definitely want to see the reality.

Catch the train, bus to the suburb. Walk around. Go the local shops (if people are way too depressed looking, stay away). If I feel safe, I know it’s in the short-list.

Talk to business owners.

Check out the school against NAPLAN. Cheltenham is increasing in value every year because family with a daughter wants their girl to go to Cheltenham Girls High School. Families like to give their kids the best education they can get, even if its public school education. We can’t all go private or selective.

Read investment magazines, they’re good source of info.

Hope these practical advice helps.

Angelina

Hi Yann,

I have a property in Emerald. I’m very bullish on the Bowen Basin for a number of reasons however you are correct mining is a huge part of it. The projections of growth for this industry are immense of the back of the development of immerging economies such as China and India. If you immerse yourself in research into the fundamentals of this I’m sure you will appreciate the huge scale of what is about to occur.

An excellent source of information is The Australian Financial Review. When I talk about the underlying fundamentals I mean such things as the development of a middle class society in China and India demanding things that we take for granted. New housing, new cars, new shopping centres and the list goes on…and guess what? It all requires coal! Hard coking coal to make steel and thermal coal to create the power to make the steel! Where is the worlds premier source of coking coal? The Bowen Basin. And now thermal coal is going to be mined out in the Galilee Basin 160km west of Emerald in some of the biggest mining developments Australia has ever seen!

But that’s not all…soft commodities are now booming. Cotton, wheat, wool. Emerald farms both Cotton and wheat!

Understand the underlying fundamentals to an investment and with it brings confidence in your decisions.

JT

Blackwater Has always had a woolworths before the boom in the busts etc.

However there is no maccas,bunnings etc

if your going to take a punt on blackwater go for newer housing with a good long company lease

hi Yann, where has your research lead you so far?

I live in Emerald and I work in blackwater sometimes and know the area well.

I know people who live in blackwater that have been trying to sell there house for years, it seems to be a place that is a little difficult to liquidate.

You should generally find that the returns will be better in blackwater then they are in emerald, Though IMO I would not invest in blackwater because its to risky.

Have you been to blackwater ? its a hole, no one would live there for the atmosphere, there are few shops, the pubs are drives, the pizza place makes some of the worst pizza in australia and its just a red rocked dessert dive with crappy old houses.

I know the guy who owns one of the service stations there and he is closing it because he has not been able to get any employees for over 5 years !!!

Basically everyone in the town works in the mines or in some way that directly gives services to the mine.

Now, you don't need the mine to close, you just need coal demand to soften or the price to fall a bit and jobs will be lost and vacancy's will over night be very high.

I know many people personally who work in the mines and they all would prefer to live in Emerald, even though there is a 76km drive.

Emerald is a regional hub and has more then just mining going for it, There is massive industry in emerald, agriculture and the town is much much nicer, There is a huge big shopping centre being built here right now that will have stores such as harvey norman a new big wollies, ect

The newly renovated Irish pub is really nice too, they spent 3.8mill on the renno and imo its one of the best pub/clubs in qld, it rivals places down at the coast.

Lake Maraboon is the second largest lake in Qld, apparently the largest man made lake in australia and bigger then sydney harbour

thanks hbbehrendorff for the info

Around 1 year ago I spent 5 days in Blackwater speaking with locals and agents. Who ever I spoke with from the postman to the miners everyone said there is a lot of coal there and has been for the past 30 years. The miners said they are sleeping in tents because of no available accomodation wich is a good sign for rentals. 1 year ago there was quite a few houses under 300k, now there is none. The rental yield is fantastic with long mining leases in place. I agree with Emerald being more diverse and that Blackwater is very dependant on the coal but in saying that median house prices in Blackwater 10 years ago were 50k. Look at Moranbah and Dysart those towns are still going strong. I like Blackwater but I agree it would be a risky investment.

who cares how pretty the lake looks, there are seven mines surrounding the town with 2 possibly being built next year. most coal around blackwater is mettalurgical and contracts are in place for around $250-$300 a tonne. now if the price drops to say $120 a tonne its still feasible to mine as it costs around $90 a tonne to extract. id be happy with a 25% return let alone 200%

I worked on these units for over a month.

Barry is building 4 more on the front part of the block.

How much does he want ?

I know they roughly cost him 250k each to build.

what was the price of the land?