Investing "out of town"

[phm]

4680 - Gladstone

Hi NIF

Just thought I’d share what I know about Gladstone. It has been experiencing a boom time of late. There was a shortage of water, with residents only allowed to use 6000l of water a week per household. This has been alleviated with them receiving about 20 inches of rain recently. They are also looking at building two desalination plants, one near the power house and I’m not sure where the other one is, which should alleviate some of the long term water problems.

There is a huge amount of industry in the city, with a lot more in the pipeline. There are two hospitals and quite a few schools as well as a university and a TAFE. There are three large shopping centres, two at Kin Kora (suburb) and one in the centre of town (the Valley). There has been advertised a block of units to be built in the centre of town consisting of all batchelor pads. The city centre is pretty dead. (I’ve noticed that a lot of towns have a pretty dead city centre.)

I’ve heard that Contractors can earn $900 a week. The rents are high and the properties are very scarce. They are however building a lot of new houses this year, around the $190 000 mark. These will probably be further out in the new suburbs however (car needed) as there is not a lot of land in close.

The city has a mosquito problem, with Council fogging streets when needed. One area that I know of that also has a sandfly problem is the new parts of Clinton. They also get coal dust drift from the power house.

Glenlyon Street is one of the main streets in the city. The northern side of this street cops the smell of QAL. QAL (Queensland Alumina Ltd) is quite old and locals wonder just how long before it closes down. Barney Point, the suburb that QAL is situated in, has about the only bit of residential waterfront available in Gladstone . I’ve been told (but haven’t verified this) that the caravan park in Barney Point, which is across from the water, is owned by the Major.

House buying is hot and decisions have to be made pretty quickly. I had been told by a r.e. agent that some people were just buying properties and onselling them with a huge markup, and not doing anything to them.

Rent for a 3br brick was $200pw a couple of months ago.

This is just my ideas on the city, based only on my research, but it may help someone who is looking at the area. If you wish to know any more, please let me know.

 

[phm]

Hi Johnno

I am an inexperienced investor, however I know Rockhampton. I tend to agree with you for a number of reasons.

The Magnesium plant has a ten year contract with the Ford company. This isn't a very long contract however. There has been a bit of movement in the area with regards to other industries as well. For example, the meatworks closed down last year, (I think it was, or was it the year before?) citing all sorts of supply problems. However, in the months before closing, it spent millions on upgrades. There are people who work for the same company, but in other towns, that are starting to be moved to Rocky now. Something in the pipeline? There are other industries as well.

There are two postcodes for Rocky. 4700 and 4701. I remember looking up some info in the two recently and 4701 was increasing in value and rents quicker than 4700. 4701 is the area where the shopping centres are and the uni, whereas 4700 is closer to the industrial area of Stanwell, where the power station and the magnesium plant are.

The council announced recently that a 250 odd room motel was going to be built behind the Pilbeam Theatre, and they were hoping that the Sheraton would take it. I'm not sure of the correct wording on that.

My theory, however, is that, because Gladstone has had such an enormous boom and Rocky is only an hour away, there may be a flow on effect. I don't know how long it would take however. The Rocky council appears to be very proactive.

There are parts of Rocky that do go under water, so you'd need to check that out.

I must stress that I have done no "IP research" on the town however.

 

[NIF]

Thanks Johnno & phm.

I assume the real estate boom in Gladstone is associated with all the industry & jobs in that area.

Are there also lots of upcoming jobs/projects in the Rockhampton area ?

 

[phm]

Hi NIF

With the establishment of the magnesium plant in Rockhampton, there may be industries that follow on from it. There was an announcement last week of a large company (I don't remember it's name,) that did something with repairs and maintenance of city's sewerage lines, that was opening up in Rocky. It must have been something big because the major and the company's big wigs were both on tv together.

Incidentally, on the news last week, there was an article about "southerners" buying, sight unseen, properties in Rocky for the $200 K plus mark. One real estate agent reckoned it was the best it's been in 20 odd years. A quick look at the local property guide over a few weeks, however will alert buyers to the fact that there are heaps of houses around the $100 K mark.

 

[ndavy]

PFM Gemini

Can I ask where that article was?

Thanks

davo

 

[brains]

Reub,

One thing no one has mentioned is if you are buying remotely to get an independent valuation on the property you are considering buying.

Do not use any companies recommended to you by anyone connected with your property purchase. This includes conveyancing, finance, building/ pest, property management & valuation.

With all the above in place and having done your research on prices & rental yields at different price points in the area you are looking at, you should do fine.

Ive done it with great success and didnt get to see one of the houses in person till 4 months after the purchase.

Dont forget to have some digital pics sent to you by the builder and if you can the real estate you are buying from and/or the managing agent.

 

[Guy]

I found that gaining finance on an IP in a distant locale was easier when we spoke to banks/brokers who were had a branch/lived in the area (found them via google).
Our local finance providers were suspicious of NthQLD & were wanting to tie up more of our equity with 50-60% LVR's. Since the IP was 3 flats on a commercially zoned block they wanted higher interest & a commercial loan.
A local broker (FNQLD) got us a std residential loan, which resulted in large savings in equity & interest.

To get local info I rang a few of the churches .... I figured the ministers would know what was going on, & would give a neutral viewpoint.

A friend dials up white pages enquiries, picks a common surname & asks for a number, rings them & explains that she's wanting to buy property the town & wants their opinion on prices/rents etc., & asks them who else in town would be worth speaking to.
It's amazing the info she gleans.