Expert Advice: by Sam Saggers
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YOUR SHOT AT A ONCE IN A DECADE MINING BOOM
- OR IS IT JUST A ‘PIE IN THE SKY?’
Today I’ll share some great tips on how to understand the mining/commodity industry so you know what towns can get you amazing growth in a short time frame. I’ve brokered hundreds of millions of dollars worth of property in mining markets for both myself and clients, so I know they can be fantastic money-making deals!
During 2004-2007 Australia had a mining boom which saw some markets around Australia triple in value. In 2005 for example, I helped a client buy a 4 bedroom house in Moranbah (an old mining market) for $136K, today that humble house is worth $500K and it rents for $1000pw and nicer homes in that area are starting from $750,000 and renting for $2000 per week! Good investment? Absolutely it was in 2005, what fantastic capital growth. The property doubled in value twice in just 6 years.
In 2004 I was buying in Port Hedland properties for clients off BHP for $100K, which are today worth $700K! Other market places that performed well during these years were Karratha, Dysart, Middlemount and Kalgoorlie.
So are these locations you want to invest in now? No. You do NOT want to buy into these “Old Mining Markets” as they have already reached their ceiling value and probably won’t grow again for quite a while.
Perhaps before you enter into a mining market – you should ask yourself this question, “Can I really see a property in a town of 7000 people, valued at $750,000 rising in value to $1.5 Million dollars in the next five to seven years?” If you can’t, then don’t buy. There are great mining towns, where properties start from $300,000 which offer high returns…towns which for numerous reasons will become the next mining hotspots!
So where should I be looking right now?
Throughout 2011 and heading into 2012 there are NEW mining markets; influenced by a new commodities boom, which is creating a new market cycle. I believe this new MINING BOOM is STARTING RIGHT NOW in 2011 and will finish in 2014!
There are new mining markets to discover where a pool of international heavyweights and mining giants are collaborating and injecting billions of dollars (and these are the areas we believe you should be investing in this year) so you can mirror what happened in the last mining boom.
Sam Saggers is CEO of Positive Real Estate and Head of the buyers agency which annually negotiates $250 million-plus in property. Sam's advice is sought-after by thousands of investors including many on BRW’s Rich 200 list. Additionally Sam is a published author and has completed over 2000 property deals in the past 15 years plus helped mentor over 2200 Australian investors to real estate success!
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Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
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