Positive Property E-books | Edition 2
How to Pick the Next
Boom Town
crawfordpropertygroup.com.au
Contents
The road less travelled can be paved with reward!
1
A boom town defined
2
Spotting the next boom town
4
Identifying a boom town
6
Considering the population
8
Considering the current housing market
10
Examples of long-term boom towns
12
Do’s & don’ts of buying in a boom town
16
Are there likely to be anymore boom towns in Australia
18
Case Study 1
20
Case Study 2
22
Summary
24
About the Author
25
The road less
travelled can
be paved
with reward!
‘Boom towns’ across Australia have delivered many property
investors some phenomenal returns in recent times.
In very short periods, rents and house values in boom areas can
skyrocket to levels beyond anything experienced in capital city
locations around the nation. They offer incredible opportunities
to fast track wealth creation - but not for the ill-informed and
under-prepared.
Boom towns are similar to pressure cooker environments. Rapid population growth puts immense pressure on
housing, quickly resulting in extreme housing shortfalls as demand from renters and buyers outstrip supply. Rents
and prices are quickly driven up, benefitting those who purchased prior to a boom or subsequent upswing.
Over the last decade many boom town success stories have been heard around the country. From Port Hedland
in Pilbara’s northwest WA to Moranbah in central QLD. The locations could not be further apart but the dynamics
that make them powerful boom towns are strikingly similar. Towns caught in the grip of resource industry growth,
unable to keep up with housing demand and are experiencing substantial rental and value hikes as a result.
Some boom towns rise and fall over a short time period of just 12 months where as others last over a decade.
Over time, supply can catch up with demand as government and housing developers react to the situation and
demand can drop off after a town’s infrastructure development phase has reached its peak.
In this report, we’ll cover how you can identify the next boom town, considerations for purchasing there, and
how to invest long-term in the right towns to benefit from continued positive conditions.
Many of the most impressive rags to riches investor case studies originated in boom towns around the country.
They used the rapid growth, high returns and available equity to grow substantial portfolios in record time.
Knowing how to spot the towns with short term growth prospects and those with long term growth prospect is
the key to successfully investing in boom towns.
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How to Pick the Next Boom Town
A boom
town defined
A boom town is generally defined as a town or city that
experiences sudden and rapid economic and population growth.
This growth is often due to resources activity – i.e. a precious
commodity such as gold, oil, iron ore or coal has been found
nearby. Consequently, industrial projects are developed to
exploit the discovered resource. The massive investment in
infrastructure required for the projects results in an economic
surge in the town. People relocate to the area en masse to work on the lucrative projects and the demand for
housing spikes.
A boom town may also emerge from growth created by industrial projects not related to the discovery of resources,
especially those that require workforces in the operational phase as well as the production phase. These may
include power stations, desalination plants and wind farms.
While the term boom town is most often applied to
regional areas, it can also apply to towns that are growing
rapidly as a result of sudden prosperity. In recent years, for
example, Perth has been referred to as a ‘boom town’ due
to major resources and infrastructure developments being
undertaken in Western Australia. In some cases, cities are
growing rapidly due to reasons other than resources such
as new transport infrastructure, a new popular attraction
or even affordability.
A boom town is generally
defined as a town or city
that experiences sudden
and rapid economic and
population growth.
Boom towns are not a new phenomenon and have been documented as far back as the 1700s.
In the United Kingdom, for instance, early boom towns such as Manchester, Liverpool and Leeds experienced a
dramatic surge in population and economic activity during the Industrial Revolution at the turn of the 19th century.
In Australia, some of the early boom towns were Ballarat in Victoria, which prospered during 1850s to 1880s due to
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How to Pick the Next Boom Town
the gold rush, and the Gold Coast in Queensland, which grew rapidly between the 1980s and 2000s due to strong
domestic migration.
More recently, some of the strongest boom towns in Australia have been Port Hedland and Karratha in Western
Australia’s northwest, and Moranbah and Gladstone in Queensland. All have prospered from the discovery of
resources and subsequent mining activity.
Boom towns are typically characterised as having undergone ‘overnight expansions’ in terms of both population and
economy as people stream into the communities for high-paying mining jobs and other related business opportunities.
While many of the job prospects derive from the resources companies, others recognise the opportunity to provide
services and amenities to this large, highly paid workforce and open businesses in the towns.
Boom towns are generally often unprepared for the
sudden increase in population. Available housing can
become absorbed very quickly leading to a bidding war
among buyers and renters and prices escalate rapidly.
Despite the efforts of local government to increase supply,
this typically takes many years to bring to market whilst
property values and rents continue to rise.
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Boom towns are
generally often unprepared
for the sudden increase
in population. Available
housing can become absorbed
very quickly leading to a
bidding war among buyers
and renters and prices
escalate rapidly.
How to Pick the Next Boom Town
Spotting the
next boom
town
Investors can clearly profit from investing in the boom towns,
but how do you identify the next big boom town in Australia?
Get the timing right
Investors can capitalise on the huge growth in property values
and rents in boom towns if they get their timing right. Buying
a property in the town before it starts to boom is the key to
reaping the greatest returns.
It doesn’t mean that investors who buy in after the town has already started to boom will not benefit - they can but they won’t realize as much of a capital increase as those who bought in prior to the original market jump.
Often investors will learn of a boom town from the news - but if the media is already reporting that the town is
booming then the opportunity to make the biggest profits is long gone. You need to identify the boom town before
it actually starts booming. In mining towns, this is usually when a project is on the drawing board, but is yet to be
publicised.
The chart on the next page illustrates the three main phases
of a resource project and the best timing for investors to buy
in to a market. The design phase – or even before – is the
Buying a property in the
most opportune time for investors to buy in to an up-andtown before it starts to boom
coming boom town if they want to reap the greatest profits.
The development phase is when the greatest amount of
is the key to reaping the
money is spent on the new project and when the largest
greatest returns.
number of jobs are on offer. Economic growth in the town
peaks during this stage and it will hit the height of its boom.
While investors can still benefit from investing during the development phase’s peak, they will not see as greater
rewards as those who bought in before the economic benefits started flowing in.
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How to Pick the Next Boom Town
Design
Development
Operational
This is the best time for
investors to buy in, the
project is just on the
drawing board and has
not yet been approved.
More investors will buy into the
market at this stage, and they
will profit, but not as much as
those who bought in at the design
phase or before.
This is when contsruction of
the project winds down, and it
enters operations. Fewer jobs
are required, as the construction
teams are no longer needed.
Hence it is not the opportune
time to buy in
Chart: The three main phases of a resources project
Industry magazines and websites
Many property industry magazines profile suburbs or towns in each state around Australia, and if you scour
through these you may find that there are some potential boom towns amongst them. Even though these are
essentially in the ‘media’, often these industry magazines – as well as property-specific websites - will identify
potential boom towns ahead of the mainstream media – i.e. newspapers and television.
Similarly, resource industry magazines and websites will also be a useful source of information. You may find
mention of upcoming projects in these that are in the ‘pre-feasibility’ stage and as such, have not been fully
released into the public domain.
Top 20 resource companies
Search the websites of the top 20 resources companies, or look at their announcements on the Australian Stock
Exchange (www.asx.com.au). This will give you an indication of their activities and where they are concentrated,
and in turn may help you identify where their next big projects are planned.
Get involved with other investors
It’s also helpful to get to know other investors by joining investor groups. They may have tips about up-andcoming boom towns, and you can capitalise on the research they have already undertaken and their knowledge.
Expanding your knowledge base is always very useful.
Get your hands on informative research reports
Freely available over the web at www.crawfordpropertygroup.com.au they will help to identify major new
infrastructure projects that will create a boom town. Additional companies such as Residex and Herron Todd White
can be useful for this.
Government websites
You may find long-term plans for the development of particular areas here, or information about projects that
have been submitted for approvals.
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How to Pick the Next Boom Town
Important
factors to
consider
Once you’ve identified that an area has the potential to boom
due to a planned project, you need to do further research
before rushing out and investing your money in the area.
Consider the project pipeline
carefully
It isn’t enough to simply identify that a project is planned for a town. That doesn’t necessarily mean that a) it
will definitely go ahead and b) that it will be enough to create a ‘boom town’.
While you want to get in early and make sure you capitalise as much as possible on the upcoming growth in a
particular town, it’s important not to just dive in and buy a property in a town as soon as you hear that a project
that is planned for the area. The last thing any investor wants is to buy into a town based on the hope that a
particular project will go ahead only for it to fails to materialise.
To avoid this, investors should look for towns
that have more than one project – that is, a
pipeline of projects. This means that if one
project falls over, which can often happen,
your investment is safeguarded by the
additional activity taking place in the town.
Looking at towns with a project pipeline will
reduce your risk and maximise your returns.
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Investors should look for
towns that have more than one
project – that is, a pipeline of
projects. This means that if one
project falls over, which can
often happen, your investment
is safeguarded by the additional
activity taking place in the town.
How to Pick the Next Boom Town
Follow the money
When it comes to the value of the project pipeline, bigger is better. A pipeline of projects worth more than $2
billion is a good benchmark.
Diversity
Risks will be reduced if the projects
in the pipeline for a particular town
are across more than one industry.
Some areas have several billiondollar projects across two or more
industries.
Risks will be reduced if the projects
in the pipeline for a particular town are
across more than one industry. Some
areas have several billion-dollar projects
across two or more industries.
Longevity
Consider the length of the projects in a town’s pipeline. The longer the better. It means timing your exit won’t
be such a big issue and you’ll have greater opportunity to capitalise on growth in the market.
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How to Pick the Next Boom Town
Consider the
population
The permanent population is the
most important
The permanent population is where the demand for housing
predominantly comes from in boom towns, so when investors
are doing research it’s important to quantify what this will be.
The fly-in-fly-out (FIFO) population also contributes to demand
for housing, but since they come and go, and won’t be there
forever, it’s a less important consideration. The permanent population figures and projections are all the more important
as more companies warm up to the idea of workers camps – areas near the mines where temporary houses are
constructed for staff. The increasing use of camps and mining villages means less pressure on the housing markets
in those areas, and consequently investors will not see as much pressure on property values and rents.
Alpha – a remote town in Central West Queensland,
situated in the Galilee Basin around 150 kilometers
It’s important not to just dive
west of Emerald – is an example of a boom town
in and buy a property in a town
that could have been, but due to FIFO workers,
it’s unlikely it will ever experience one. There have
as soon as you hear that a project
reportedly been a handful of mining companies that
that is planned for the area.
have recently arrived in the town eager to exploit its
thermal coal reserves, but they have all indicated
they will use FIFO workers and accommodate these
workers in onsite camps. With no workers relocating to reside in the town, it’s unlikely the market will experience any
increase in housing demand.
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How to Pick the Next Boom Town
Permanent jobs for the population
As we noted earlier, resource projects generally have three phases, and the development phase is where the
majority of jobs are created. When investors are considering potential boom towns, it is important to look at the
operational jobs that will come out of projects, as once the development is complete, this will be the base for the
permanent population, and will determine
the demand for housing in the long term.
In this case, the more the better.
Size
It’s important to look at the
operational jobs that will come out
of projects, which will determine
the demand for housing in the
long term.
A town will experience more of an impact
from a big infrastructure project if the
starting population is quite small. When a
billion-dollar project happens in a small and
remote town it will have a much greater
impact than if it happens in one of the large capital cities. So essentially it’s the percentage growth of the
population that is important.
The town needs to be big enough however to accommodate an increase in population, so it needs to have the
basic services and amenities – including shops, schools etc., as well as water and electricity - and be able to cope
with growth. A population between 5,000 and 40,000 is a safe bracket - big enough to cope with an influx which
will result in a boom, but not so big that the impact is diminished.
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How to Pick the Next Boom Town
Consider
the current
housing
market
Supply
Investors looking at potential boom towns need to determine
how much housing is available in the market and whether an
influx of people and the associated demand for existing housing
will create an undersupply.
It’s possible to determine how many dwellings are in a town by looking up the latest Australian Bureau
of Statistics Census data (www.abs.gov.au). You can also search SQM Research’s vacancy rates data
(www.sqmresearch.com.au).
It’s also a good idea, in the course of doing your due diligence, to talk to local real estate agents and the council to
find out what the current housing situation is
in the town you’re looking at investing in. Local
councils can also provide information about
If there is enough supply to soak
zoning, and give you an indication of future
up the incoming demand, its unlikely
supply – i.e. whether there are developments
underway or vacant land available that will
prices will be significantly affected.
significantly improve the housing offering in the
town. As specialists in boom-town areas around
the country Crawford Property Group are able
to assist as you conduct your research in this area
–
www.crawfordpropertygroup.com.au
If there is enough supply to soak up the incoming demand, its unlikely prices will be significantly affected.
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How to Pick the Next Boom Town
How remote is it?
The more isolated a town is,
The more isolated a town is, the more
likely it is that the housing market will be
the more likely it is that the housing
pressured as workers have little choice
market will be pressured as workers
over where to live. When you’re doing your
have little choice over where
research, consider how remote the town
to live.
you’re looking at is. If there are surrounding
towns providing an alternative for the influx
of workers to live in then this may affect the
capital values and vacancy rates of the town you have your eye on.
The concept of the ‘ripple effect’ is quite well documented, where house prices in a good capital city suburb
increase first and then flown into the adjacent suburbs, when people are priced out of the primary suburb. But if
there is no adjacent suburb, the pressure can’t go out, it can only go up. Indeed, if we look at the previous boom
towns in Australia – such as those in WA’s Pilbara - they have been regional areas that are remote, with little or
no towns in commuting distance.
What to buy?
If you have done your research into a potential boom town and concluded it is a good place to invest, then
consider carefully what type of property you will buy. While it’s likely that the entire housing market will see a lift,
certain properties will be more highly sought after, and may therefore give you greater returns. It’s likely these
properties will be of the ones of higher quality, and will be most suited to the main demographic. This is where
Census data can again come in handy – you can use this to determine what the current demographic is, and what
the demographic is likely to be when workers move in. Previous Australian boom towns such as WA’s Port Hedland
would provide a good insight into the demographic and what their requirements are.
Consider infrastructure in the town
Improved infrastructure within a town doesn’t usually come until after the population has begun to grow. However,
if you can identify that the government, for instance, is planning on building some new infrastructure for the town,
this is a good sign they are anticipating growth.
This is also a good indicator that the town has longevity – without an improvement in infrastructure it is unlikely
the population will stay on after the projects they are working on are completed.
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How to Pick the Next Boom Town
Examples of
long-term
boom towns
Port Hedland, WA
This small town in the Pilbara region of WA’s northwest was once
a remote outpost with a population of 1,200. Port Hedland has
a natural deep anchorage harbour which, as well as being the
main fuel and container receival point for the region, was seen
as perfect for shipment of the iron ore being mined in the ranges
located inland from the town. In 1965, with the development of
the region’s first iron ore deposits, it became a frenzy of activity and expansion. It has grown to become the largest
bulk commodities export port in the world, shipping ore from vast mines operated by companies including BHP
Billiton and Fortescue Metals Group.
In addition to iron ore, Port Hedland is home to one of the largest private salt mines in the world, Dampier Salt,
and is a major support centre for the
offshore LNG gas fields of the North
West Shelf.
Over the past decade the iron ore
industry has boomed, fuelled by
Chinese demand. More than 20
mines in the Pilbara have been
developed or expanded.
With
much of the ore exported from Port
Hedland, the industry’s growth has
had a dramatic impact on the town’s
economy.
Over
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the
years
Port
Hedland’s
How to Pick the Next Boom Town
population has grown to its current level of more than 20,000 – rising by more than 60 per cent over the past
seven years alone. This rapid population growth put immense pressure on Port Hedland’s housing market, creative
lucrative investment conditions for investors. The average annual growth over the past 10 years for Port Hedland
has been around 20 per cent, which is double the average growth seen in the state’s regional areas overall.
High demand for rentals and limited stock also resulted in impressive rental yields of up to 13 per cent.
Over the past two years, the completion of several large industrial infrastructure projects at the port have seen
demand for housing cool as the large workforces were scaled back. The construction of new housing also increased
supply. For now, the town’s boom has subsided, returning rents and house prices to more affordable levels.
While Port Hedland may have undergone a period of
unsustainable growth – to the benefit of many investors the town still has plenty of investment potential.
Its iron ore exports are only set to grow as the mines shift
from development to production and both BHP and FMG
have indicated they will require further port expansions
as their tonnages increase. Port Hedland also has a major
new project currently ramping up development – rail and
port facilities for the $10 billion Roy Hill iron ore mine.
While Port Hedland may
have undergone a period of
unsustainable growth – to
the benefit of many investors
- the town still has plenty of
investment potential.
Further, the town is undergoing a dramatic revitalisation
as the government strives to transform it into a ‘City of
the North’ attracting an increasing resident population.
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How to Pick the Next Boom Town
Moranbah, Qld
Established in 1969, Moranbah is a coal mining town created specifically to cater for the miners working in the
surrounding mines and their families.
The town was rapidly expanded in the late 1970s by the Utah Development Company in order to house these mine
workers. Since then, the coal mining industry has continued to grow in the region and Moranbah has grown and
developed significantly. It is now the number one mining town of the Bowen Basin, directly servicing 12 mines
within 50 kilometres of the township – more mines than any other town in Australia.
Its population has been growing substantially, rising from around 7,500 in 2006 to nearly 9,000 in 2011 - a 20 per
cent rise in five years. In addition to its permanent population, it also has a large fly in/fly out (FIFO) population.
While Moranbah’s resident population is around 9,000 at the last count, its role as the service center for the mining
workers employed throughout the Isaac Regional Council area, means it caters for a population of around 23,000.
As its population has grown, so too have housing prices and rents as insufficient supply has struggled to cater for
demand. Properties in the town recorded annual capital
growth rates in excess of 20 per cent and in 2011 the town
topped the ranking for capital growth in Australia with a
Many investors are
massive 29 per cent increase in property values.
Moranbah has also experienced huge growth in rental
returns with a 1,000% increase in median rents from $170
per week in 2002 to a whopping $1,710 per week in 2012.
The huge capital growth rates and rent rises earned it
a reputation for being the number one boom town in
Queensland for property investors.
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confident of the Moranbah’s
longevity and ongoing growth
prospects given its robust
position as the region’s major
service centre.
How to Pick the Next Boom Town
Over the past 18 months, the drop in the price of coal has, unsurprisingly, had an impact on Moranbah. The
projects in the area cut staff and expansion plans, and some new projects were canned. This resulted in a drop in
both rents and house prices but the huge growth experienced prior means that most investors who got in before
the boom and subsequent market normalising are still ahead. Many investors are confident of the Moranbah’s
longevity and ongoing growth prospects given its robust position as the region’s major service centre.
Median house value and annual growth in Moranbah: 1999 - 2012
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How to Pick the Next Boom Town
Do’s & don’ts
of buying in a
boom town
Do 1) Property Selection:
As in any market there are certain types of properties that are
more or less desirable to the local corporate and private leasing
market. It’s important to remember that almost anything will
lease for a good price during a boom period, but when the
market starts to settle, it’s important to ensure that the property
you have purchased will still be desirable to the RIGHT tenants.
Speak to your local agent to ascertain the type, style, configuration and leasing rates achieved by the properties most
in demand in the town. Ideally you want to select a property that will perform well in both boom and quiet market
periods, offering extra security or return during these periods.
Do 2) Aim for a secure lease
Many properties for sale in boom areas offer existing leases in place. Purchasing an investment with a secure, medium
to long term corporate lease is ideal and will offer a high level of security on your investment by minimizing the chance
of vacancy periods and tenant changes. But be careful to
not pay too much for a property just because if offers an
When a boom town
attractive lease, compare the property and rental rates
against other similar properties in the area to ascertain its
starts to run it generally
comparable value.
Don’t 1) Get caught up in
the hype
When a boom town starts to run it generally receives a high
amount of media exposure, resulting in an increasing flow
of investor buyers into the marketplace. This rapid increase
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receives a high amount of
media exposure, resulting
in an increasing flow of
investor buyers into the
marketplace.
How to Pick the Next Boom Town
in buyers quickly turn the local market into a seller’s marketplace where it’s not uncommon for multiple investors
to bid over a single property and buyers (desperate to not miss out) pay in excess of the asking price to secure
properties.
Avoid getting caught up in the hype, make
an informed, researched decision, prepare
your finances and when ready, pounce on
your desired boom town property, including
a condition on your offer to the agent
limiting the consideration period to that day
only. This will place urgency on your offer
and get the sellers immediate attention.
Avoid getting caught up in the
hype, make an informed, researched
decision, prepare your finances and
when ready pounce on your desired
boom town property.
Don’t 2) Buy in at the very top
Short term boom towns generally have one strong market run which can last anywhere generally from three
months to two years. Long term boom towns offer these same growth periods, however they generally come
around every three to four years.
The key to ensuring you’re not buying in at the top of a shortly ending growth period is by addressing the market
factors. If prices in the town have been increasing rapidly for over 12 months running, chances are the growth
period will be coming to an end shortly for that cycle. If the town has gone through a period of no growth or even
a reduction in the market over the previous 12-24 months, chances are that long-term boom town may be ready
for its next project based upswing, at which time your recently purchased investment can benefit from capital and
rental growth.
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How to Pick the Next Boom Town
Are there
likely to be
more boom
towns in
Australia?
According to a recent Bureau of Resources and Energy
Economics (BREE) report, there are over 63 projects at the
committed stage, with a combined value of $240 billion,
and around a quarter of these are underway in Queensland.
According to BREE, there remains an opportunity to sustain
high levels of investment in the resources and energy sectors,
should projects at earlier stages of development proceed
through the pipeline.
WA’s resources sector has also seen a substantial increase of investment into its resource industry and infrastructure
projects on the back of the weakening Australian dollar - click here for link
As the chart below shows, there are still a large number of projects that are likely to go ahead, and for investors,
this means there may be
opportunities to find new
boom towns in Australia
that will benefit from
these planned projects
and or benefit from those
investing into the long
term boom towns such
as Hedland, Karratha,
Newman, and certain
central QLD towns.
Source: Bureau of Resources and Energy Economics ‘Resources and Energy Major Projects – October 2013’ report
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How to Pick the Next Boom Town
While the media have been reporting since 2012 that the commodities boom is over, the reality is that there is still
plenty of demand out there for our resources.
The global economy is expected to grow
by around $50 trillion US dollars by 2025
– essentially doubling in size over the next
two decades. Across this period, the primary
driving force fueling the global economy will
be urbanisation.
Like industrialisation before it, urbanisation
is producing a tidal wave of economic growth
and driving the booming commodities
industry. The global trend of urbanisation is
significantly contributing to the increase in
demand for resources, while new forces in
the global economy – namely China, India,
South Korea and Indonesia – are all on a
path of development and growth that is
seeing their need for steel, coal and LNG
soar.
Leading this growth is China, which is
forecast to see its economy grow by a
Chart: GDP change between 2011 and 2025 (2005 real PPP US$ trillion)
breathtaking 150% between 2011 and
2025. That’s triple the growth rate of the United
States and the Europe Union according to recent analysis by the world’s largest economics organisation, Global
Insight!
If you are looking at a potential boom town because a resource has been discovered and there will be infrastructure
projects to develop it, do some research regarding the global demand for that particular commodity. This will give
you an indication of whether the project is a) likely to go ahead and b) have longevity.
There are still a large number
of projects that are likely to go ahead,
and for investors, this means there
may be opportunities to find new
boom towns in Australia that will
benefit from these planned projects.
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How to Pick the Next Boom Town
Case Study
Name: Jakab Golding
Lives: Perth
Invests: South Hedland
Properties: 2
When Jakab Golding was working as a laborer for the charity St Vincent de Paul, in Perth he had no idea that in just
a few short years his decision to invest in positively geared property in the Pilbara would lead him to sit beside world
famous Donald Trump at one of his motivational addresses.
Jakab is a ‘rags to riches’ story that inspires other budding investors to enjoy a quality life, based on capitalising on
opportunities in mining towns.
Back in 2003, Jakab had just arrived in Port Hedland after two years as a door-to-door salesman and several years
laboring with St Vincent de Paul.
“I arrived in Port Hedland with very little money but a lot of ambition to make a success of my time there. I didn’t
even know how to drive a car when I came to Port Hedland. However, after reading several books by Robert Kyosaki,
I knew that the property market in the northwest was a prime area to make money, as it still is.
“During my first two years in Port Hedland I held a number of jobs which included working for FMG to assist young
unemployed aboriginal people to gain employment in the mining sector.
“The income from this employment enabled me to purchase my first property in South Hedland. It was located at 25
Mauger Place and I purchased it for $125,000 in 2005.
“Due to the success of this property, I decided to purchase two additional properties in South Hedland the following
year – 107 Kennedy Street and 87A & B Bottlebrush Crescent.
“I purchased 87A & B Bottlebush Crescent through Ryan Crawford and was so impressed by his high level of service
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How to Pick the Next Boom Town
that I organised for Crawford Property Group to manage all of my properties in the Pilbara as well as selling my
property at 25 Maugher Place for a profit of $400,000 in 2008.
“Investing in positively geared properties in the Pilbara has totally transformed my life. Today, I have a combined
rental income from my properties of nearly $6,000 a week and a property portfolio valued at $2.7 million.
“Before my decision to buy these properties, I was living from week to week and unable to really enjoy life.
Today, I am effectively retired as I live
on the passive income from my South
Hedland properties.
Before my decision to buy these
properties, I was living from week to
“The income generated from these
properties has allowed me to pursue
week and unable to really enjoy life.
my love of travelling – I have travelled
Today, I am effectively retired as I live
extensively throughout the world over
recent years. It has also allowed me
on the passive income from my South
to indulge myself in my love of music
Hedland properties
and I am currently working on a major
music project that I would be unable to
undertake if I was working in a 9 to 5 job on an average salary.
Jakab plans to add to his current property portfolio by engaging the services of Crawford Property Group to
identify more positively geared properties in emerging hot spots.
Property
location
Rent per Purchase Purchase Current estimated
week
date
prices
value/sale price
Unit, Wembley, WA
2001
$69,000
Sold for $240,000 in 2006
House, South
Hedland, WA
$1,800
estimate
2005
$125,000
Sold for $525,000 in 2008
House, South
Hedland, WA
$2,300
2006
$450,000
$1.1m
Duplex, South
Hedland, WA
$2,500
combined
2006
$550,000
$1.6m
Townhouse,
South Hedland, WA
$1,350
2012
$730,000
TOTAL
$7,950
$730,000
$4.2m
Jakab’s property portfolio
+21
How to Pick the Next Boom Town
Case Study
Name: Andrew and Michelle
Lives: Perth
Invests: Newman
Properties: 3
When Andrew and Michelle decided to begin their investment journey, positive property struck an instant chord
because it was an investment that would put money into their pockets each week on top of their current salaries.
“The desire to take control of our financial future and be free from the everyday stresses is what motivated us to
begin investing,” says Andrew.
“We wanted to begin enjoying the luxuries
in life before it was too late while also paying
off our home as soon as possible.”
A smart approach
We are now beginning to enjoy
the nicer things such as going to
restaurants etc. without thinking
should we or shouldn’t we?
Using the equity in their Rivervale home
in Perth along with some saved cash, and
the assistance of a specialist property
investment mortgage broker and investment advisor, the couple invested in their first properties in 2013 – two
apartments in the mining town of Newman, WA.
“Our broker assisted with the funding process and identified our best lending options, and I used my 12 years’
experience as a CPA accountant to put together the required tax structures to ensure protection,” Andrew says.
“We did our research and then we confirmed our property selections with our investment strategist. We discussed
+22
How to Pick the Next Boom Town
various options before making the decisions based on our risk profile.
Goals on track
Andrew and Michelle’s two properties currently generate $2,800 a week in rental income. “Our current goal is
to use the positive income produced each month to offset our the mortgage on our home with the end goal of
paying that off within the next five years.”
Andrew says that while it’s early days, they are already making a sizable dent in their home’s mortgage by
having the positive income sit in an offset account. The offset will also provide the cash deposit to fund their
next purchase which will further increase their positive income and allow them to achieve their goal within their
timeframe.
“We are now beginning to enjoy the nicer things such as going to restaurants etc. without thinking ‘should we
or shouldn’t we?’ and being able to include our families and friends so the people close to us also benefit from
our success,” says Andrew.
Securing their future
Like all first time investors, Andrew says taking the first step and not looking back is the biggest challenge.
“And it helps to approach it with a business mindset. Base your investment choices on the numbers, not
emotion,” he says.
“Make a commitment to securing your financial freedom at a young age and work diligently towards your goals.
Complete the required due diligence and discuss your findings with an experienced property investment mentor
who can guide you further.
“Now I not only look forward to pay day, but to both the middle and end of the month when I get paid my
positive income from my investment properties.”
Property
location
Rent per Purchase Purchase Current estimated
week
date
prices
value
House, Rivervale
WA
Primary
place of
residence
2010
$790,000
$955,000
Apartment,
Newman WA
$1,200
2013
$575,000
$580,000
Apartment,
Newman WA
$1,600
2013
$650,000
$665,000
TOTAL
$2,800
$2.2 million
Andrew and Michelle’s property portfolio
+23
How to Pick the Next Boom Town
Summary
The resources industry is now reaching renewed levels amongst
higher profits caused by the lower Australian dollar. Over the
coming years resources will continue to be discovered and
developed, and boom towns will emerge fuelled by other
industries and projects outide the resources industry.
The key to successfully investing in property in any location is a
thorough due diligence process; a potential boom town is no different. Some boom towns will not have longevity, and
are typically one trick ponies; with their economies are dependent on a single project. You can make money, but you
need to get your timing right - buy before the boom and learn to recognise when the boom has peaked so you can
sell before things start to wind down.
Short-term boom towns will continue to appear throughout the resource-rich regions around the country and will
generally be restricted to towns with a population of 10,000 or less. They will provide opportunities for nimble investors
to make a quick return if they get their timing right
Other areas have experienced volatility but their growth
prospects remain positive. These are areas with robust
economies (long-term boom towns) and have several
projects with long life spans and further in the pipeline.
These are boom towns likely to produce ongoing and
secure returns over the long term.
Investors considering investing in boom town regions should
always do their homework; research and due diligence to
ensure the area suits their specific investment goals and
desired outcomes!
+24
Over the coming years
resources will continue to be
discovered and developed.
Other industries and projects
will also emerge outside
resources to fuel new boom
towns.
How to Pick the Next Boom Town
Ryan Crawford
Successful Positive Property Investor
Word from the
Author
Ryan Crawford has been involved in the property investment industry for
over ten years, making the transition from successful investor to real estate
professional.
Ryan is a firm believer in the power of cash flow positive property for rapid
wealth creation. In just eight years he built a multimillion dollar portfolio which
generated a second passive income so large he could have retired.
Instead, having refined his strategy for wealth creation, Ryan dedicates his
time to helping others achieve their financial goals.
“Financial freedom is within everyone’s reach. We have enabled many
investors, previously unaware of the power of positive property, to build
multimillion dollar positive property portfolios.”
Ryan Crawford
Author
Ryan
+25
How to Pick the Next Boom Town
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In your personalised session, we will discuss your goals and make sure
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You will receive the following on attending your One-on-One
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