NSW Broken Hill - Low debt, very high yield

for what some people spend in Sydney on a home they could buy land and start their own suburb in some rural areas and become king of the town.

 

Years ago there was a story of a couple from Mt Morgan who won $millions on Lotto.

They started buying properties and businesses in the town with their winnings.

Apparently, they even bought the local service station so that they wouldn't have to pay for fuel .

 

And look how much Mt Morgan has changed now.
Lucky they purchased businesses because they had to go back working 3 years later from memory.

 

I was thinking the same thing, would be same story for property managers, 10% management fees on your $100,000 houses would be 20 bucks per week. I'd imagine there would also be a lack of investors which would make their profits even lower (I just checked RP Data suburb report, 74.6% owner occupiers in 2011, bit of an old stat but nothing more recent). Don't see how real estate business is possible there, unless everyone is very underpaid.

 

I believe you are right.

With such a great strategy, I was totally dumbfounded they ended up there .

 

Low end stuff is 5-10% to make it worth their while

Selling agents in sa are pretty slack due to this

 

If you buy up a large chunk of a town it is potentially easy to manipulate comparable sales for valuations.

Imagine you owned 20 properties in whoop whoop worth $50,000 each. You list 3 of them for sale through an agent and then get an associated entity to purchase them (quietly) for $100,000 each.

You then refinance the rest and refinance up to $80,000 which is now 80% LVR...and pull out $600,000 cash

 

That's sounds like a really good strategy .

I might give it a go. If it works, I might even be able to rename the town from whoop whoop to Fraudtown .

 

Plutuspayrollville?

 

That would be one of the suburbs, the main financial district .

 

Has anyone actually been to Broken Hill? We did a year or two ago and were totally shocked by the areas of slum housing. If we hadn't booked accommodation we may have kept driving. The town centre was quite charming, and we stayed in a lovely little miner's cottage, but the cheap houses are cheap for a very good reason.
Marg

 

Yep, lived there for 6 years!

 

they must have had overflow/spillage buckets placed under the pumps to collect.

 

I don't believe that was their plan. I think it was drive in, fill up and drive off.

 

Yeah, we have been there multiple times, over the years. Mainly because I had a SIL and her hubby live there. Then she was transferred to Dubbo and then North Haven (thank God for the transfer system).

We always thought that Broken Hill was paradise after stopping in places like Wilcannia .

 

old properties cost money, so that yield will not necessarily be achievable
risk, risk and more risk.

 

Buy a well located 3 bedder for 30 k put 30 k of reno back into and sell it for 100 k

should clear 20 k

 

Slowed down when looking around Wilcannia but didn't stop!!
Marg

 

Estimated resident population | Broken Hill City | profile.id

Says it all.

 

We spent several daylight hours in BH last month. For what it is worth, from the perspective of grey nomad/free campers, there is a bit of economics happening over at the Racecourse. This expanse of prime equestrian fertilised real estate is being turned into a camping ground for the other 363 days of the year that they don't race. It hosted a wedding the day we were there. Perhaps camping is the biggest business in the town, although Coles and Woollies were both rocking too.

Have a look at flood maps and the properties in low-lying streets, and the high volume of for sale signs around town. There were quite a few boarded up vacant motels, restaurants and businesses too.

This is a time when NSW is supposed to be booming.