Western Australia - Port Hedland - Advice for purchase

Hi all,

I have a property I am in negotiations to purchase on Dempster St Port Hedland, Western Australia.

Rental is on long term lease of 1150 but review in April to potentially bump up to 1200. Its on a corporate lease.

The property was purchased in the WA property boom (2011) for around 1.1 million and they are trying to now sell for 629,000 and I am waiting on whether my offer of 580,000 may go through.

The house looks fairly new and right opposite the ocean.

What is everyones view on this area and the rental yield. Is it worth it?

Further details of the advert if it helps.

INVESTOR OR HOME HUNTER ALERT
It’s an absolute pleasure to offer this property for sale, with an elevated viewing platform and stunning ocean views this home has the edge over all others, unique and outstanding come to mind when wandering through this family home, throw in the sparkling below ground pool in the back yard and you have a complete package.

A property of this statue commands executive tenants which is reflected in the strong rental of $1,150 per week, companies like to hold valued staff so long leases are usually the norm on top shelf properties like this one. If you’re a home hunter this may be the one.

Four bedroom two bathroom solid brick home
Magical ocean views from multiple locations
Split system air conditioning, downlights to living areas
Quality flooring throughout, robes to all bedrooms
Modern kitchen, two large living areas with ocean views
Massive main bedroom with balcony & luxury ensuite
Carport plus a large brick garage/work shed/man cave
Easy care 708sqm block with dual car access
Large elevated alfresco area with ocean views & breezes
Below ground fibreglass swimming pool

 

Due your DD - ring council before you do anything and find out if it's in the dust restriction zone. Also, how much deposit do you have? LVR's are very different up there compared to normal IP purchases and it varies significantly between banks.

Also check insurance costs - they can be huge in Hedland.

 

If you don't know the area well, then you shouldn't even be touching something like this with a ten foot pole.

What if the property is worth half of that? And the market rent a third of the current rent? Both possible scenarios as I understand of the area.

 

Thanks for your quick responses.

To answer your questions. I can pay the 20% deposit. Is more required for this area? Also what are the consequences if it is in the dust restriction zone?

Regarding the area, I am not too familiar with it but I have got the RP data report which says estimated value of approximately 605,000 with high confidence.

 

First up not having a dig because I haven't done any research on the area.

Even if the RP data report is accurate now - do you back that it's going to be higher later on?
I would suggest prior RP data reports also showed higher values
How long is the lease? If it wasn't on a corporate lease what would it rent for? What are similar properties renting for?

What's the future of the area/mining looking like?

 

Those reports range from being okay as a rough guideline, to completely worthless and misleading.

I still stand by my previous advice. Do you have much property experience? If this is one of your first properties, my advice applies doubly so.

 

Ring council and ask them. They should be able to email you a paper that covers it.

 

Just confirmed not in a dust restriction zone. Getting paper sent through.

 

Last I heard prices fell back 65% in this mining town....ouch

Mind you I purchased in US where prices fell back 70% at that time, difference 6 million population, and a diversified economy

 

Call Dave (Harry) Hipworth at LJ Hooker Karratha if he is not selling.

Harry is honest as the day is long, has a heart of gold, loves the area and knows it intimately.

 

I still think Karratha is a better option as a much more diversified town than Port Hedland.
Fe, NaCl, LNG etc