AUSTRALIA THE LUCKY COUNTRY

WE RODE ON THE SHEEPS BACK

THIS TIME IT IS THE RESOURCES BOOM

Moranbah – Why?

Moranbah sits in the heart of the mines.

A perfect base for miners to live and be sent to any mine.

Moranbah – Why?• Developments within the town on Res A land,

which typically only have a single house on it, are able to be removed without restriction and Multi Unit Dwellings (Units/Townhouses) will be approved under a Development Application (MCU – Material Change of Use)

• The town is landlocked due to the surrounding land being mines owned by mining companies (mainly BHP).

• What do we mean by landlocked?

Moranbah

Moranbah – Why?

Our Property

Our Property

Our property

• Purchase price $668,000• Rent per week $2,200• Return of 17%

Our planned development

• Build two townhouses on our free land• Build costs $300,000 ea, inc fees = $600,000• Sell townhouses $650,000 each = $1,300,000• Profit $700,000 less fees $600,000 (roughly)• Pays off loan on old house, income stream

We then got offered next door

Second Property

• Purchase price $508,000• Expected rent per week $1,600• Return of 16%

The Development Changes

• Then realised we can build ten townhouses• Build $3,000,000 + $1,176,000 = $4,176,000• Sell all @ $650,000 =

$6,500,000• Projected profit over = $2,000,000• You bloody beauty

•That’s the positives

• What about the negatives?

Sewer Lines

Negatives• BMA workers have been on strike, so no new

workers were employed for a while• ULDA releases land for affordable housing• This created an over supply of houses to

purchase and for rent coming onto the market• Taking too long to develop. You may miss the

window of opportunity to get in and out with a healthy profit

12 Months on

• First house rents for $1,600 per week (2,200)• Return now of 12% (17%)• Second house rents for $700 per week (1,600)• Return now of 7% (16%)• We had to adapt to the market

The Development Changes Again

• Keep first house and build 5 townhouses, 1 at the back and 4 on second block @ $300K each

• Build costs + Other Props Total $1,500,000 + $1,176,000 = $2,676,000

• Sell 5 @ $650,000 = $3,250,000

• Estimated profit $600,000 less fees, plus we• Still have old house paid off for income stream

What if they only fetched $550,000

• Build costs $300K + Old Props = Total $1,500,000 + $1,176,000 = $2,676,000

• Sell 5 @ $550,000 each = $2,750,000

• Estimated profit $74,000 less fees plus we• Still have old house paid off for income stream

Lessons Learnt - Many

• Minning town properties can move very quickly up or down, purchase and rentals

• Get in and out and take a profit asap• Keep an eye on what the mines are up to• Research, research, research• Developing is a roller coast of emotions• Watch out for the “Pitfalls”