Friends of mine have 2 on the gold coast, in the same complex. For them its been a success. They have an income agreement with the management company, which sets out the minimum income for the year the body corp etc, and the time they get to use it, I thinks its 2 weeks. They go up at peak times.
I guess it all depends on the management company and the agreements in place, which of course can change over time.
My friend has a cash flow positive, negatively geared for tax (due to depreciation etc) investment. He was not looking for (and I dont know whether he has) capital gains, but the property is near the beach, and is bigger than 50 sqms and is able to be owner occupied, so theoretically it should be having the same CG as similar non holiday lets in the area?