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NSW Muswellbrook

Discussion in 'Where to Buy' started by Darlinghurst Boy, 29th Jun, 2015.

  1. Darlinghurst Boy

    Darlinghurst Boy Well-Known Member

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    Have been browsing the internet looking at the Muswellbrook areas (upper Hunter NSW)
    I noticed over the last few months very slow turnover of sales.
    Anyway today I decided to ring the Bank and ask for a Loan.
    As soon as I gave them the postcode he said they will not lend but then when I said i had a bigger deposit they agreed.

    I believe these areas possibly could have good potential for capital growth,.
    Its a risk I guess but I did ring the Real Estate agent in that area who told me of the wonderful things that will be happening soon.
    More mines will soon open up? New shopping centre? Of course its his job to try to sell to me so i understand his motivation.
    I must say he was very polite and informative.
    He sensed my concern at not being able to find tenants but assured me in most cases he has a full rent roll.



    There are still houses in Tobruk Ave, Skellator Street etc for low 100's, with potential rental income of $130-150.
    One thing that did concern me was Tobruk Ave apparently does have housing commission houses in that street so these seemed to be ex housing commission houses.
    My concern is can i find tenants ? Will the house sit vacant a long time?


    I must say I have only ever passed through Muswellbrook, never actually stopped so I need opinions on growth etc,i guess Muswellbrook is about 2 hours drive North of Newcastle NSW.
    I realise everythings a risk but when a Bank is skeptical to lend money on an area it has me worried.
    I ask you guys your opinions, im only new to property investing so Im learning from this Forum.
    And thankyou for the great forum, i hope to be able to learn from here , thanks guys;)
     
    Last edited: 29th Jun, 2015
  2. sash

    sash Well-Known Member

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    Rough as guts...and where are the tenants going to be post mining boom???

     
  3. Be Developer

    Be Developer Property Developer Business Member

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    Rental market is soft and will get softer... Best to invest elsewhere....what sort of budget you have?? May be we can suggest alternative...
     
  4. Leo2413

    Leo2413 Well-Known Member Premium Member

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    Last edited: 2nd Jul, 2015
  5. C-mac

    C-mac Well-Known Member

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    You could definitely do better than that. Dare I say that any postcode in this country doing houses on blocks for under $150k will carry huge risks (of different kinds, but the general theme is 'crap tenant quality mixed with lack of employment prospects').

    Pockets of SA, TAS and regional NSW have this kind of stock, but few are worth investing in.
     
  6. Gibson

    Gibson Well-Known Member

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    To paraphrase Amy Winehouse (RIP)
    "they tried to get me to Muswellbrook, I said NO, NO, NO!!!"
     
  7. Azazel

    Azazel Well-Known Member

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    He has his own street? Awesome.
     
    Vacant, dmb1978 and Biz like this.
  8. Harro

    Harro Well-Known Member

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    Just a friendly piece of advice; continue to read posts on this forum and analyse what you read. Educate yourself before jumping in!
     
  9. Pistonbroke

    Pistonbroke Well-Known Member

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    Suss out commercial in the area. I hear that if you are able to build a turnkey project with a few thousand m2 to high specs there's no shortage of takers. (Most of the commercial space is sub-standard).
     
  10. Darlinghurst Boy

    Darlinghurst Boy Well-Known Member

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    BHP has just announced another 300 Jobs to go this week in this area.

    But looking at Domain etc it appears Muswellbrook prices have gone up not down !!!
     
  11. TMNT

    TMNT Well-Known Member

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    are you sure they are actually rising? or are the asking prices just gone up a bit?
     
  12. Darlinghurst Boy

    Darlinghurst Boy Well-Known Member

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    Well.. I remember this time last year houses in Tobruk Ave were in the early 100's but now about 140k.
    I cant see how their selling them?

    Its overpriced for a risky investment area .
     
  13. dan2101

    dan2101 Well-Known Member

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    It's a shame about the BHP announcement as the vacancy rate has just started to stabilise in the past 6 months around 3-4%. Hopefully this announcement doesn't blow it out again!
     
  14. Xjas

    Xjas Active Member

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    You'd be a very game investor to buy is Muswellbrook at the moment, despite what an agent may tell you a large portion of Muswellbrook's economy is mining based and coal mining has furthur to fall yet.
     
  15. Azazel

    Azazel Well-Known Member

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    Not a very pleasant place to drive through these days, those mines are massive. Such an eyesore.
     
  16. ellejay

    ellejay Well-Known Member

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    What are you hoping to achieve with $130-150pw rent? For an outlay of $100k (if you can buy for that) it's still a poor yield for the associated risks including vacancy rates. Even if you had it unencumbered and let out consistently the rent return doesn't really make it worth while holding. When you inevitably need to replace something it could wipe out any gains for years. At least you're looking outside the box a bit.
     
  17. TMNT

    TMNT Well-Known Member

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    I guess its the same sort of dilemma for investors in karatha etc.
     
  18. Azazel

    Azazel Well-Known Member

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    7.8% is great, they should go for it.
     
  19. ellejay

    ellejay Well-Known Member

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    Well each to their own, but $600 odd or less p/m gross return doesn't leave a lot left after you've paid insurance and rates. Not to mention any vacant periods/repairs and maintenance etc. If it's an area with no real hope of capital gain in the short to medium term I'd say that return is pretty pointless- meaning it's highly likely to not reach the only possible goal of actually providing cash flow. So no capital gain and negative/very little cash flow. If it's an area where I'm looking at cash flow only I'd be looking for a return closer to 9% or better and minimum return around $250pw. Just mho.
     
    Last edited: 13th Mar, 2016
  20. Xjas

    Xjas Active Member

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    To tell the truth I find it more amazing than anything, the fact humans can build these massive machines that can move mountains facinates me and really a mine is no more a blight on the natural landscape than a city or most forms of agricuture, at least when the mining is finshed they are supposed to put it back the way it was before they started.
    Having said that the sooner we move to renewable forms of energy the better, while I find open cut mines to be amazing feats of engineering the coal they produce is not doing good things to our planet.