Resort Accomodation in Cairns

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From: Debra L


A colleague of mine has been looking at purchasing a unit in Cairns for holiday letting. The marketing agent seems to be keenly following him up, with new newspaper articles etc. that depict the benefits of Cairns as an investment spot.

Having read through the paperwork, they are projecting an income of around $523 per week, on a unit costing around $260K, and of course their charts reflect a 52 week occupancy rate. With the annual Body Corp/ Mangagement/ Cleaning charges etc hitting a massive $14K per year, without taking into account the interest paid on the loan, it seemed that any capital growth that may be achieved would probably eaten up in fees.

To my question though, for anyone who is familiar with Cairns. What sort of occupancy rate would you expect to be more realisitic? How many weeks of the year would you expect to be vacant. Worst case figures would be preferred.

Also is there an over supply/ under supply of holiday letting units in Cairns?

Any feedback would be appreciated.

Debra
 
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Reply: 1
From: Jeremy Laws


I am interested in Cairns always, I like the place, I will hopefully buy there soon, but NOT repeat NOT for anything holiday related. My guess for your friends place is to conservatively allow for a 30% occupancy. Absolutely no more than 50%. I think Cairns represents some of the best buying in Oz you can get, but don't rely on holiday income
 
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Reply: 2
From: Rolf Latham


Hi Deb

JLs got it in one. Holiday and good investment generally dont go together with rare exception.

Ta

Rolf
 
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Reply: 2.1
From: Dale Gatherum-Goss


HI

A client of mine bought a unit in Cairns last year for holiday renting.

This fellow did an incredible amount of due diligence and research first and then presented all of the information to me for my thoughts.

I am aware that his returns have been very good for the five months that he has owned the property except for the month after September 11.

I believe that if you are careful and research the situation properly, you might just find that elusive gem in the sun.

Be brave, but, be careful!

Dale
 
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