WA Properties in Mining Towns

Drop in the bah is more like 70-90%

 

No I'm blonde & never had dreadlocks, unless your thinking of someone else. Yes, agree with arrogance comment. LOL

 

Had a good discussion with him since then and went over his finances to work through the issue. He will be ok, big set back but not to the point of suicide or depression long term.
Worst part was in 2012 when he purchased I adviced him that it's to risky to buy in a mining town, especially as it's early on in his portfolio and could stuff his investing up for life, I even mentioned if mining when bust he wouldn't be able to sell or rent. (Not selling is the extreme, most likely sell just at much much much less that what he bought it for. But I had to drill the message through). Anyhow it didn't work, he said he likes to roll the dice. Now he can't sell it at a loss, till he pulls together more savings to rid off it.

I believe there are more gamblers out there than investors, common sense goes straight out the window when they use borrowed money.

 

Merry Christmas Barny!

Yes generally speaking people are not fulfilled and so they seek to fill themselves up via money, property, drugs, alcohol etc

Thats where they invest like animals instead. Wanting the hit, getting the highs and lows.

If people are empowered and fulfilled, know themselves etc, then they will make more grounded choices and not get swept up in the crowd.

 

Well timed post Kate, Thank you.

You cannot beat a contented life. It had taken many years before I learnt to manage my emotions. No point in living a life with the wounded soul. Forgiveness is the key.

Woke up early this morning and took time to see what exactly I wanted last year, how hard I worked to get it and where am I and is my foundation safe and stable. People can call me slow, but hey I am happy and not procrastinating and everything else is secondary.

I am a strong believer of power of the subconscious mind, written by Dr Joseph Murphy and when in doubt, I ask my Subconscious mind to guide me. It has done wonders to me and i am always grateful to the universe to put me on this track.

 

Kate are you serious?
last time I looked perhaps 2 years ago Karratha etc was around 25%, what a disaster, feel for those who got burnt

mtr

 

Good for you!

Well, people do spend millions of dollars trying to attain happiness and still never find it. Society puts way too much value on what we "have" to determine the worth of a person. We've got it the wrong way around.

Everyone has their unique journey to take. Even if "your plan" doesn't work out, if you just trust, things will work out in the end anyway.... they always do. Its the surrendering part that is the hardest.

Good for you on trusting yourself. Its a rare and necessary skill set to thrive in todays world.

 

Sorry this is Moranbah thats dropped 70-90%. (I live in Moranbah, we call it the bah!). Although WA mining isn't going so well. I know people with newman property that are struggling.

Yes it is very sad and its still unfolding. It sucks balls when you owe more on your properties than what they are worth.

merry christmas by the way !

 

If you get sound advice and ignore the perils that is not risky investing, it's pure gambling, ignorance and just greed factor.
I don't have any compassion for investors who have all the resources, support and mentoring available to them and still ignore it and follow their greed.

 

Agree @Greyghost

Property Investing should not be about get rich quick or tell me the next "hot spot" that seems to be the feel I get from a lot of new investors.
When you think about it needs to be a very measured process when you are researching an area to buy in- population,income,demographics etc etc with the thrill for many investors being in actually securing the deal itself.
I see the process like a take off checklist for a pilot,measured steps that lead to the desired outcome every time...might not be sexy but it takes away the risk

 

that sucks big time.
I am no expert when it comes to mining towns but I Karratha, South Hedland much larger mining town than Moranbah.
Would you believe WA government even got burnt big time, building apartments close to peak.... that's our money down the loo....

MTR

 

Coota9, its not only newbies that get burnt and its not necessarily how slow/fast you go IMO.

What you mention is important, but the biggest one that sticks out for me is getting your timing right and keep LVR at safe levels.

The investors who got burnt in mining towns are the ones who purchased at peak, or close to peak.

MTR

 

Yes they are larger. Moranbah has population of 7,000 and they predicted something crazy like 20,000? or 30,000? people to live here by 2030. It won't happen now.

Governments can be just as silly as people.

its not really the population that matters, a mining town is a mining town. A lot of the factors that made mining towns worth investing in are all gone now. As they say, you can't polish a turd.

 

Agree,if you brought prior and exited at peak you would have made a killing but greed would have stopped many from doing this.

May be similar in certain parts of Sydney in the next 12-18 months but on a smaller scale.

 

Some markets moved too quickly and there wasn't time enough to get out.

 

Your right, watching Syd West starting to fall significantly, this is where the boom started. I know some investors have already pulled out their money. I guess it wont hurt to hold if it is cash flow positive, but we are now also seeing interest rates on the rise.

MTR

 

The balance of perseverance and surrender is important. Both let you dig deeper in the issues.

Perhaps one of my job in process engg taught me on this as there is always something to fix, control or manage, one tiny miss and the results won,t be as good as expected.

“If you can’t fly then run, if you can’t run then walk, if you can’t walk then crawl, but whatever you do you have to keep moving forward.”

Martin Luther King, Jr.

 

A few people have mentioned about risks and mining towns,

the way I see it every investment is a gamble and risk, some more then others,

when you see articles every month about someone buying a million properties in 10 years, people start thinking they need to do that in order to be successful,

and a lot of people, brokers, magazines, investors and myself included do push the "oh if you do 90% LVR then you can buy 4 Ips instead of 2"

this to me is no different in buying in mining towns,

both are quite risky but risks in different ways,

this also applies to shares with margin loans or geared type share funds.

its only when things go pear shaped that everyone starts saying that how risky buying in the mining towns are


when I went to my first share trading seminar a few years ago involving margin loans, I was shocked, the magnify your gains aspect was emphasised but I instantly asked myself "well what happens if it goes backwards? your losses are too!" and it scared the hell out of me

if an investment you bought goes down by say 50% unless it was a one in a million occurance, or signficant bad luck, id say it was a risky investment in the first place

we all look at bad events with a fine tooth comb after its happened. for example, an individual with lots of mining town properties when things were booming would be laughing all the way to the bank, but when it all collapses people will pick out all the risks. Say if you went out tomorrow and bought 10 IPs in western sydney, the yields would be ok, and people/magazines would be congratulating them on their acheivement, but if IR went up and prices plateaued or even fell, they'd basically be the laughing stock of PC

but good on them and all of us for giving it a go!

my two cents

 

Its always easy to look in hindsight though, isn't it!

You just got to have a go and the key character trait to have is to be able to admit you stuffed up, still love yourself anyway and then try again when your ready too.

I think that so called "failure" should be renamed to a cleanse. You cleanse your finances, life, mindset and friendships. whats meant to stick around will stay around, and anything superficial will depart your life. Then you reflect, repair, rejuvenate and get back up to try something that is more in line with your true self.

 

We exchanged contracts on Wednesday. We have to wait until 19 January before it can go unconditional. My real estate agent reckons I am not allowed to stress and she will do all the stressing for me. We should have enough equity in the PPOR to refinance it for the shortfall so we shouldn't have to sell any of the properties that do have great growth potential next year. Thanks again for all the kind words.