Mackay, What Suburb

[slide588]

Hi Feradd

Only because my investment focus has changed and I want to simplify. I'm starting up a company to develop some software for the mining industry. But the property deal its self makes sense. I've got a rental appraisal for $520-550pw that can be used for bank finance. At 80% rent and with the NRAS top up that's good positive cashflow. Am happy to provide further details and avoid agents fees if someone is interested.

cheers
Stephen

 

[Feradd]

Thanks Stephen,

Just wondering if investors are attracted to the new builds in Mackay or not. I was investigating building insurance premiums in the city of Mackay (including Stevenson St) and they are very high, approx $150pm for a build cost of $200k. It doesn't seem to matter much if the property is inside or outside the Q100 flood zone, the premiums are roughly the same. No doubt rental yields are high so there is excess cash to cover expenses such as higher than average building insurance.

I'm trying to gauge whether investors generally are being turned off by the high insurance premiums in central Queenland.

 

[slide588]

Hi Feradd,

Don't know and can't speak for other investors. But I think you have 1 too many zeros in your calculations as a 200m building insured at $150pm is a crazy amount! My belief is rents are high due to the usually tight vacancy rates Mackay has. I bought for this and the expected population growth.

cheers,
Stephen

 

[outbackjack]

I think Mackay is still very flat. I paid top dollar several years ago for a unit at the last peak. Still owe 247k for small two bedroom unit.
GFC killed Mackay and it hasnt really recovered since. Gone to be a long time coming I think before there is another peak.

 

[norwoodman]

How are things going in Mackay at the moment? Seems the vacancy rates are well and truly on the increase... has anyone in the Mackay market noticed any impact on rents and yields?

 

[outbackjack]

I am not sure on vacancy rates etc, but think Mackay will die a slow death, since the GFC it never recovered. With coal going the way it is etc, there is not much else for Mackay.

I think it will be another 10 years at least before things turn around again, only if demand for Coal goes up again.

This is my opinion and hope I am wrong, if the market goes up again, then I would sell my property in a heart beat.....