investing in mining towns, page-5

To add to this Tex, as I have mentioned before on these threads, my sister bought 2 properties for about 8 k each in alpha and then sold later for ten times as much when a mine was approved nearby. She only held for a couple of years.

On the other hand, a prop investor at my workplace was recently complaining that his tenents had headed for the new housing just built in Karratha, even though his investment props there were very clean neat and tidy, they are not new.

They were yielding over 15%, this is why he bought them, chasing mega yields. But where there is greater reward, there is greater risk, and this (according to him) came in the form of the council suddenly realizing that rents and prop prices were too high so they release some of the copious amounts of land in the place, next thing you know, homes are built, add to this, a large mining co build completes at the same time so a whole bunch of people leaving town permanantly.

Price of his places in Karratha now free falling well below purchase price with no one to rent them.

Moral is, lots of research required before being lured by high yields. As Ike says, better to get in long before people even suspect there is going to be a mine nearby and get out the moment they find out. That is not easy and would require making a few mistakes and gambles on particular mining co.s making it to production in greenfield areas.