tex3,There are many risks, I own one myself (not in Emerald),...

tex3,

There are many risks, I own one myself (not in Emerald), fortunately for me building and land purchase cost is capital guaranteed by a mining company, but I can't sell and take the profit (up $300k for 2 1/2 years) yet.

In the last 20 years of this I have seen houses bought for $8k in 2000 to 2001 sold recently for $400k and well above

One change in policy from a major mine in a area wipe rent by 30% in a afternoon 2005 I think it was, with that banks then and rightly so, wanted bigger deposits for new purchases (around 40% depending on age etc) and considerably reduced values on houses etc.

Then no one wants to rent the old houses because there is choice in the market, so you need to work out what you buy and how long you want to hold it.

Exactly the same as the stock market, goes down quicker than it goes up, call it a correction if you like, buy the dips and sell the rallys. Only thing is it's not just the push of a keyboard to instantly open or close a posistion and you can't go short to make money on the way down.

As far as Emerald goes there are people moving back into their houses 12 months after the last flood. That would mean 12 months without rent I guess. Also concrete pads that went under in 2008 had a house to go under in 2010. Does that mean the council can be trusted?
May never happen again in our lifetime or could happen this month.

There are some good out of the flood areas there but can you find them for certain if you're not a local?



If there is a glitch in the pay system the mine workers won't be paying the $1600 to $3000 (they don't earn this latter ammount) depending on where/what you buy so it could take a bit to get things flowing again.
While it may seem that pressure can be put on the mineworker to pay the rent because their name is on the rental agreement you may well look forward to interesting times (unions have very good lawyers) trying to make them pay more then their agreed subsised ammount, normally around $55 a week. While it may seem a bit unfair don't forget that it is the investors who are pushing the rents not the mine workers.


Here's a plus for you.
In some mining towns the companies are paying 2 years rent in advance so they don't have the hastle of workers being moved out if the house is sold or what ever.


When probably more so than If some more camp accomodation comes on line then housing could come back to reality. While currently it is not uncommon for quality houses to not be advertised and only be on the market for hours it still takes weeks for the deal to be done, as you would be aware and it's not sold till the money is in your bank account, even if you have the inside line it still takes time to complete the deal unlike the stock market which is almost instant.

CBA, NAB and ANZ are the banks around these towns, check their feelings, I have heard, possibly unreliably that the banks mentioned are pulling up on lending to higher than the market is as they see it as being over inflated, which is hard to disagree with. They will know more than most investors and have more future market control than anyone I would think.

Bit of a idea myself and a mate discussed was to build a new house, get a high priced rental contract and sell it to a southern investor, thats as much risk as I would take personally. As they say better 3 months early than one day late.

There are people who have made plenty out of this, I know a business man who bought nearly 30 houses in the early 2000's and is getting over twice the rent per year as he paid for the houses.

If you have a crystal ball so you know when it will end then the answer is not a gamble, or if it was to be a one in a part of a portfilo then the risk is spread.

Mind you I am not a great property investor, while I do have some rental property's that have 180 degree ocean views the return for me is poor and capital growth zero as it's worth about the same at present as I paid for them one 8 years ago and one 5 years ago. The profit from the sale of a principal place of residence in a mining town paid for a good deposit on them, but I will put that down to luck out of necissity as I never purchased any more than what I lived in.

Like anything in life if you want to be good at it and can handle the risk then it should work for you.

Personally I only trade BHP in NY. oil, gold and currency, and only trade not invest so I'm possibly not giving you as good a picture as it could be.

My current thinking on realestate is that it should be longer term traded like the more expensive shares eg RIO, BHP, NAB CBA. so there is a time to buy, sell and be flat.
Of course it depends on where you buy what the dividend will be.

Just been as honest as what I can see since you asked and tried to show why I look at it from this angle.