It pains me to talk about this topic, but it needs to be aired,
“What Happened To Mining Town Moranbah?”
Why did prices drop from over $700,000 to $200,000 in some instances????
For an old 3 Bed House???
See this advert below from realestate.com.au, over 3 years ago it would have sold for $500k to $600k plus:
Some of you reading this may be annoyed or down right angry that I’m bringing this up, but you may recall I nearly got caught up in all the hype myself.
I had flown up there in early 2012, and had signed a contract to buy a $740,000 house, 3 bed, unrenovated house with rental appraisals to rent for $1900 pw…
Leading up to settlement I couldn’t get it rented for $1400 pw….
I sensed something was SERIOUSLY WRONG HERE…
And luckily I didn’t go ahead…
Others however weren’t as fortunate…
Mining, the industry itself, is very cyclical and volatile, just like the share market.
It’s a commodity, and goes up and down like any other commodity like rice or sugar or iron.
So here’s 3 things to be mindful of when choosing your area:
1. Is It Booming? Why? Is it sustainable? What’s the Worst case scenario?
When you are going from $350k to $750k jump, it can potentially go down to $350k again.
But if it goes from $350k to $400k, it doesn’t have as far to fall.
2. What’s Your Exit Strategy?
If all goes pear shaped, what is your course of action?
And if it does, you need to take that ACTION.
I did.
I crashed my contract, lost my $1000 deposit, but I can sleep at night.
Thinking about exit strategy and then putting your head in the sand is the worst thing you can do.
3. See past the Marketing and Hype.
Do you know what “Hot Spots” are???
“Hot Spots” are what happen when you lose money and have to go to the bathroom.
By the time it’s a Hot Spot it’s too late.
Hot Spots sell reports and magazines.
I tell my students to see past the marketing.
Is it genuine???
Are you a lemming???
Robert Kiyosaki talks about investing either Money or Time to prepare you for Financial Freedom, I can assure you have invested alot of both.
And if you lose… know that you can fight another day…
There were times where I lost more money than most have made, but those times I learnt the most…
Til our next “chat”,
Regards
Nhan Nguyen
