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Broken Hill for first IP?

Discussion in 'Where to Buy' started by Musicbemyfriend, 28th Mar, 2016.

  1. Musicbemyfriend

    Musicbemyfriend Member

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    I have a friend who's bought 3 highly positively geared properties there and swears it's a no-brainer. Certainly, he is making money. And his view is that the population has stabilized now and won't drop anymore. Plus, there are heaps of people begging for places to live... Should I start there? I don't earn enough with my PPOR mortgage to afford much else. So who has invested there and what's your experience/opinion? And who wouldn't touch it with a pole - why?

    GO!
     
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  2. monalisa

    monalisa Well-Known Member Premium Member

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    Have you worked out your servicing?

    You may want to check some of the capital cities which may offer you cashflow neutral to positive.

    What is the vacancy rate in Broken Hill? You can check that on the Sqm Research website.
     
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  3. DaveM

    DaveM Adelaide Buyers Agent & KFC Strategist Business Member

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    Broken hill was on many lender and LMI insurers no lend postcode list... any brokers care to comment?
     
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  4. Musicbemyfriend

    Musicbemyfriend Member

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    Was? Surely that's only because it's lumped in with the "mining towns"? - I put inverted commas because it's a completely different situation to the boom and bust of others eg. Pilbara.
     
  5. Corey Batt

    Corey Batt Finance Strategist Business Plus Member

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    A steadily rising vacancy rate which is currently at 4.5% and only one year in the last decade which had a positive net population figure (net increase of three people)

    On the no go list with a number of lenders and lenders mortgage insurance. Not my cup of tea.
     
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  6. HUGH72

    HUGH72 Well-Known Member

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  7. kierank

    kierank Well-Known Member

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    Years ago, when the First Homeowners Grant was $14,000, I heard the story of a guy buying a house in the Hill for $14,000. He was a renter and became a homeowner with no cash input, except for purchase costs.

    Probably the only time/circumstance, I would buy a property in the Hill.

    Edit: Don't know whether this guy kept the property or sold it for a profit :) :). I would have sold it as soon as I legally could!!!!
     
    Last edited: 28th Mar, 2016
  8. Cinch

    Cinch Well-Known Member

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  9. Tim & Chrissy

    Tim & Chrissy Well-Known Member

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    If you wanted to build a resilient share portfolio would you purchase the high yield, high risk shares first?

    Or would you purchase the higher cost, lower yield shares that you know will likely be around forever and leave the high risk stuff for later when you have a solid foundation?
     
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  10. Ardi

    Ardi Well-Known Member

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    Only left there 12 months ago after living there for 6 years.
    Prepare for vacancies and a steep decline in values!
     
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  11. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    Hi @Musicbemyfriend,

    What is your max purchase price for this next property?
    Cashflow is great but don't just invest purely based on cashflow, especially when the near future of Broken Hill looks very bleek.
     
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  12. Musicbemyfriend

    Musicbemyfriend Member

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    I'm looking $100-$150K. Can you recommend where to look?
     
  13. Musicbemyfriend

    Musicbemyfriend Member

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    Can you elaborate on your thoughts?
     
  14. Taku Ekanayake

    Taku Ekanayake Well-Known Member

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    sorry can't be of great assistance here... I've been only focused on the low $200K's-$300K mark
     
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  15. fols

    fols Well-Known Member

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    No. That is all
     
  16. strongy1986

    strongy1986 Well-Known Member

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    Bought a house for 48k last year, did a renno, transprted all materials from melbourne - all in for 75k including interest , transport costs, chippy labour.
    Rented within a week of advertising for 200 a week. Got revalued to 100k by the bank

    Not a game changer but not the disaster some people paint the place to be
    As some have said i wouldnt be buying my first property there
    Exception is if you are hands on and have some time to make it work for you

    Only real economic positive at the moment is building tourism, bhp helping preserve town
     
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  17. dabbler

    dabbler Well-Known Member

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    Why not ? only because population decline and water issues.
     
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  18. kierank

    kierank Well-Known Member

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    It is also a:

    5 to 6 hour scenic drive to Adelaide OR

    7 to 8 hour scenic drive to Dubbo
     
  19. strongy1986

    strongy1986 Well-Known Member

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    Point being?
     
  20. kierank

    kierank Well-Known Member

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    It is close to everything.
     
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