Investing in Port Hedland/South Hedland WA
- Thread starter The Chaser
- Start date
Why is that do you think AP? Too close to capitals? Ive noticed that if you can DIDO with a little effort(such as Perth/Boddington) ....that prices do tend to track capitals... thoughts? Does makes sense though. Mt Isa doesnt have the isolation of dampier..
Its even further from perth
I meant capitals as in large cities with airports ...Townsville, Cairns. A hop and a skip if you ask me. Days driving or 55mins plane.
South Hedland
I thought I'd bump this thread up because I think that a few here might be missing a trick.
Is buying Margaret Lomas-style rock-steady median-return stuff that so many here on Somersoft seem to aspire to the answer?
I'm suggesting it's a slow slog and you can make a leap.
The following is only my personal opinion, and you can bag it all you like.
I just settled in South Hedland on a $ 930,000 4 bedder at $ 2,000 rent per week on a 2-yr lease.
That's an 11.2% yield, albeit with an 8% GST incl mgt fee and 2-wk letting fee (plus other bits and pieces) on a 6.92% I/O loan (92% CBA loan) and building & landlords insurance at $1,400/yr from AAMI (not too pricey). The previous contributors on this thread covered the ground on how pricey the costs are, but I don;t think they're insurmountable at all.
I'm feeling pretty chuffed, think the resource boom will go for another decade at least, note that the 10-yr average CG reported in last API of 24.5%, see BHP plan to invest a few more billion there as of yesterday, and so want to buy another similar one next year myself.
I've got a couple of other investments earning 4% and 5% yeilds with great CG potential (Sydney), but they're a CF- pain to hold even on a decent combined income, so just can't walk away from the CF+ adavantage of Hedland.
Honestly, it's an option you should look at.
I thought I'd bump this thread up because I think that a few here might be missing a trick.
Is buying Margaret Lomas-style rock-steady median-return stuff that so many here on Somersoft seem to aspire to the answer?
I'm suggesting it's a slow slog and you can make a leap.
The following is only my personal opinion, and you can bag it all you like.
I just settled in South Hedland on a $ 930,000 4 bedder at $ 2,000 rent per week on a 2-yr lease.
That's an 11.2% yield, albeit with an 8% GST incl mgt fee and 2-wk letting fee (plus other bits and pieces) on a 6.92% I/O loan (92% CBA loan) and building & landlords insurance at $1,400/yr from AAMI (not too pricey). The previous contributors on this thread covered the ground on how pricey the costs are, but I don;t think they're insurmountable at all.
I'm feeling pretty chuffed, think the resource boom will go for another decade at least, note that the 10-yr average CG reported in last API of 24.5%, see BHP plan to invest a few more billion there as of yesterday, and so want to buy another similar one next year myself.
I've got a couple of other investments earning 4% and 5% yeilds with great CG potential (Sydney), but they're a CF- pain to hold even on a decent combined income, so just can't walk away from the CF+ adavantage of Hedland.
Honestly, it's an option you should look at.
Great work Belbo good to hear that the prices aren't scaring investors off from this town I have seen them almost double in the short time I've lived here and was wondering whether they had reached their peak? But rents keep going up and IMO will cotinue to do so. BHPB recently increased the rental subsidy they give to their employees to a maximum of $1600 p/week (previously max $1000/week and a year before that max $350/week!) then there's the $7 Billion expansion project finally confirmed on Friday and a push to increase population to 147000 residential (not FIFO) between Karratha and Hedland by 2035. All in all the Pilbara seems to be going strong and I'm also happy to be part of it with our property due for completion by December.
Can I ask, for my info, who you are using to manage your property here (you can PM me if you like).
I have seen them almost double in the short time I've lived here and was wondering whether they had reached their peak? But rents keep going up and IMO will cotinue to do so. BHPB recently increased the rental subsidy they give to their employees to a maximum of $1600 p/week (previously max $1000/week and a year before that max $350/week!) then there's the $7 Billion expansion project finally confirmed on Friday and a push to increase population to 147000 residential (not FIFO) between Karratha and Hedland by 2035. All in all the Pilbara seems to be going strong and I'm also happy to be part of it with our property due for completion by December.Can I ask, for my info, who you are using to manage your property here (you can PM me if you like).
Hi porp e. Thanks for the reply.
I am using Crawford Realty for management. Because I bought from them also, they agreed to a discounted mgt fee rate of 8.0% vs 8.8% (I sought this in the first days of communication before choosing a property to buy), and will bargain hard for a better mgt deal on the next one. I must say I've been thoroughly impressed by their service levels so far, and hope they'll sustain this over the long haul.
One other point: I followed Ryan Crawford's advice to use a west coast broker rather than struggle against east coast non-comprehension of the Pilbara market. David Holt from Westate Finance did a brilliant job, not only getting the finance for this property unbelievably quickly, but getting my entire loan portfolio rate down from an average 7.15% to 6.92%.
Belbo
I am using Crawford Realty for management. Because I bought from them also, they agreed to a discounted mgt fee rate of 8.0% vs 8.8% (I sought this in the first days of communication before choosing a property to buy), and will bargain hard for a better mgt deal on the next one. I must say I've been thoroughly impressed by their service levels so far, and hope they'll sustain this over the long haul.
One other point: I followed Ryan Crawford's advice to use a west coast broker rather than struggle against east coast non-comprehension of the Pilbara market. David Holt from Westate Finance did a brilliant job, not only getting the finance for this property unbelievably quickly, but getting my entire loan portfolio rate down from an average 7.15% to 6.92%.
Belbo
Hi Ausprop,
You've got a point. The high resi yeilds are a direct consequence of the supply shortage, and that could be heavily affected by a major government investment in resi housing.
On the other hand, for this to really hurt, demand would have to stay where it is.
I'm of the view that demand will continue to grow with ongoing massive investment in the region's industries. That is, the government will do what it can to add to resi housng stock, but that this will be quickly soaked up and supply shortages will resurface just as strongly as before.
Of course, I could be wrong, but my money's riding on the this boom lasting a very long time.
Belbo
Belbo
You've got a point. The high resi yeilds are a direct consequence of the supply shortage, and that could be heavily affected by a major government investment in resi housing.
On the other hand, for this to really hurt, demand would have to stay where it is.
I'm of the view that demand will continue to grow with ongoing massive investment in the region's industries. That is, the government will do what it can to add to resi housng stock, but that this will be quickly soaked up and supply shortages will resurface just as strongly as before.
Of course, I could be wrong, but my money's riding on the this boom lasting a very long time.
Belbo
Belbo
Thanks Belbo! Really appreciate the info. 8% sounds pretty good considering I've heard stories of it been upwards of 10% here... though haven't looked into it myself yet. My partner and I are building direct through a local builder on a block we own so not sure if the agents would be as keen to give us a discount given they are not getting any sales commission from us but we'll see when that time comes Cheers again.
Cheers again. I think I missed that the first time...makes a long lease all the more enticing (as long as the tenants are good that is!)You're right there, Ausprop. 2 weeks' rent is a thumping, but that's the deal. At least it will be spread over a 2-yr lease in this case. Will hope to have a bit more bargaining power when it comes up next time.
If you're living in town yourself Porp E it might be worth exploring self-managing options for this reason. I self-manage two here in Sydney, and it's not too much work as they're nearby and it's only a minor irritation to organise the odd repair or bit of maintenance. It's got to be worth it on the figures, particularly as your place will be new and hardly need a thing done to it for some years. Buying land and building must have put you well in front already though - Seriously, well done there!
Belbo
If you're living in town yourself Porp E it might be worth exploring self-managing options for this reason. I self-manage two here in Sydney, and it's not too much work as they're nearby and it's only a minor irritation to organise the odd repair or bit of maintenance. It's got to be worth it on the figures, particularly as your place will be new and hardly need a thing done to it for some years. Buying land and building must have put you well in front already though - Seriously, well done there!
Belbo
Thanks
We were really lucky to get our names drawn in the last ballot. Plan to move back East however once the house is built and we've lived in it long enough to statisfy the residency requirement...been here 3 years already and starting to miss home - although I have to add this town is alot better than when I first moved here - we now have a subway and Dominos is on the way lol! - it'll be interesting to see what its like in the next 5-10yrs.
*bump*
What about now? Is it too late? And is there any point even looking at something other than a 4 bedder?
Cheers
What about now? Is it too late? And is there any point even looking at something other than a 4 bedder?
Cheers
Anyone still looking at investing in Hedland?
