Investing in Port Hedland/South Hedland WA

Asashoryu

It might be best to check other agencies.

I haven't tried negotiating with the agent in my above post yet, as I am doing some research. (Don't have prop yet)

It is expensive.....But with high yields.... everone is getting a piece of the action.

Interested to find out some recommendations from others.

It would be a no brainer to manage yourself if you are up that way wouldn't it??

Cheers,

F
 
Im waiting to hear from 2 other agencies re PM. Sadly Im in Brissie so nowhere near the place. As for negotiating........I am going to give it a shot at least, what do I have to lose. Even a 1% cut in management fees would be a start. Letting fees arent really a worry yet, I have a lease in place till Sept 10 with option for another year and its a transport company housing 3 of their people so hopeful they will stay a while.
 
Asashoryu said:
Got to agree with you Fudge, PM fees in Hedland are exhorbitant. Im pricing them up there now to manage my place and even though I am buying thru the agent they give a discount on PM. Drops from 8.5% plus GST down a whole 0.5% to 8% plus GST. Heres the rundown on their fees;

1. LETTING FEE Six month lease or under: 2 WEEKS RENT PLUS GST
Twelve months or over: 3 WEEKS RENT PLUS GST
No fee charged for renewal by existing tenant.
2. MANAGEMENT FEE 8.5% OF GROSS COLLECTION PLUS GST
(8% PLUS GST if the property is purchased through JFRE)
3. PROPERTY CONDITION REPORT $160 plus GST = $176.00
4. INVENTORY REPORT $80.00 plus GST = $88.00
5. FINAL BOND REPORT $80.00 plus GST = $88.00
6. INSPECTIONS $50 plus GST = $55.00
7. POSTAGE AND PETTIES $8 plus GST = $8.80 per month
8. ATTENDANCE AT MEETINGS $65.00 per hour plus GST
9. ANNUAL SUMMARY $20 plus GST = $22.00
10. ADVERTISING $50.00 Internet Advertising (up to) $24.00 Print Media (up to)
11. TITLE SEARCH $20.00 plus GST = $22.00
12. TENANT ENQUIRY FEE $20 plus GST = $22.00
13. COURT ATTENDANCES $65.00 p/hr plus GST to a maximum of = $325.00
14. CYCLONE DAMAGE REPORT $65 plus GST = $71.50
15. FOR LEASE SIGN $25.00 plus GST = $27.50
16. INSURANCE CLAIMS $65.00 p/hr plus GST to a maximum of = $286.00

Add all that up and it comes to a pretty hefty sum of money for managing. Im still contemplating self managing since the cost looks like being about 7k per year for my IP.
Insurance is another kettle of fish, I am chasing that up now but building insurance is going to be pretty dear as Hedland is in cyclone prone country.
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these fees are comparable to Perth rack rates.
 
Ausprop said:
you cant get the land tho reeco. what would work is a reno whereby you do the work yourself
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Im sure opportunities to purchase land will reveal themselves once i start living there. The internet is awsome, but we know the real deals are created and not advertised. Well thats my internal dialogue anyways :) An ear to the streets
 
Hey guys,

Interesting topic. I moved to Hedland Nov last year. Working for BHP. From what i've learnt the main reasons for such high rent/prices are the following.

Very High Avg Wages.
Add to that BHP and other companies subsidise rents (BHP upto $1000p/w)
BHP and Fortescue pay interest on loans for PPOR (bhp 80% Fortescue 100%)
Land is scarce and not released much due to native title issues, conservative government/council (who prolly own lots of property up here and like to keep prices up) this is just heresay from locals.
Also alot of land is on flood plains so it obviously cant be developed.

Just a note on the questions re GFC up here.. i asked when i first arrived about that one and the common answer i recieved was "what gfc?"
Infact BHP hired me and lots of other people during this time. They are committed long term and working toward doubling thier output of iron ore from the port. construction of a second main rail line is about halfway through completion, they are dredging the port to allow expasnsion there and there is alot of talk about the "pilbara cities" scheme which looks to make karratha and pt/south hedland more attractive to retain familes etc. instead of so much Fly in fly out workers.

On that i guess thats the only thing that could slow growth. If they suddenly start flooding the market with land and high density accomodation. Also BHP have nearly completed a massive camp near the airport. ( i think its a 2000 man camp) eeven has a cinema and olympic size pool.. the town itself doesn't even have a cinema!! The more of these camps they build means less people/companies renting houses.

All trades and services up here are ridiculously priced! Air cons run 24/7 365days a yr. Aot of houses are old and run down, lots are made from hardy board(asbestos) so keep these things in mind. If you can afford it buy new!! (or newish)

I'm thinking of buying up here. My advice would be to do it purely for CF+ reasons and any CG comes as a bonus! $1m houses can't keep on doubling evey 7-10 yrs......can they? lol....

For those keen on this type of investment that can't afford/justify the $800k-1m price tag.

Look into Gladstone! "They" rekon it'll be the "Next" Karratha/Pt Hedland!

I have just bought a new h/l turnkey package for $430K

Cheers

Dave
 
Thanks Dave
I am also getting lots of feedback regarding Gladstone, next boom area, curious what are the rental returns? don't think anywhere close to Karratha/Pt Hed/Sth Hed.
Cheers, MTR
 
Hi MTR,

Nah returns are about half that of Hedland at the moment @ 5% vs 10%. But from my research Gladstone has potential for much higher rents once all the construction kicks off up there. Maybe 6-12months time. Also coming from a much lower base there should be more potential for CG!!

Dave
 
My mate has just pulled into Karatha with his van. $45 a nite for a site and checked the papers for a house to rent a 3x1box advertised for $2300 a week
It would be good if you could get it .
 
MTR said:
Thanks Dave
I am also getting lots of feedback regarding Gladstone, next boom area, curious what are the rental returns? don't think anywhere close to Karratha/Pt Hed/Sth Hed.
Cheers, MTR
Click to expand...

What so great about gladstone? place North of Geraldton?
 
yadreamin said:
My mate has just pulled into Karatha with his van. $45 a nite for a site and checked the papers for a house to rent a 3x1box advertised for $2300 a week
It would be good if you could get it .
Click to expand...

was contemplating this myself. Caravan though in wickham
 
foxyleemoo said:
I'm thinking of buying up here. My advice would be to do it purely for CF+ reasons and any CG comes as a bonus! $1m houses can't keep on doubling evey 7-10 yrs......can they? lol....
Click to expand...

so if you are buying you must have the opinion that prices are sustainable? i am not sure whether to hold or sell my palce up there. the cashflow is appealling but it all depends on whether govt/mining cos can successfully come up with chepaer housing
 
Ausprop said:
so if you are buying you must have the opinion that prices are sustainable? i am not sure whether to hold or sell my palce up there. the cashflow is appealling but it all depends on whether govt/mining cos can successfully come up with chepaer housing
Click to expand...



Hi Aus
if you can do something better with your money I would take it and run. I personally think the market in this area is changing and perhaps prices may come off a little. Nice to be cashed up and take advantage of other opportunities.

Cheers, MTR
 
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