I don’t currently have any coastal property in my portfolio and I am thinking of the Sunshine Beach area in QLD. It is ‘bordered’ on three sides (Noosa National Park, Beach, highway) which creates a nice little pocket of property – and no chance of any estates or anything like that being built. Approx $600K in this market will get a 3-4 bedroom house, less than 1km from beach. Rental income for standard rent would be about $360/wk (way negatively geared). But rental income for holiday letting would approach cash flow neutral in short time and with some extra repayments on my part, would be cash flow positive before long.
Does anyone else have experience with this market (ie, Sunshine Beach & surrounding area) and also experience in holiday renting? I have heard holiday renting can be lucrative but I haven’t heard anything about the downside…and I know from experience that when you get higher returns, it’s usually because there are more risks involved. Any thoughts or perspectives would be appreciated. [biggrin]
I was up there in January
researched area a bit
holiday Rental return I found
was 40% rented in year
way too many 2/3 bedroom apartments for sale
place I stayed
penthouse was up for sale when I was there Jan 2004 AND STILL was for sale.
place across the road was just been finished when I was there Jan 2004 ALL but 1 had been sold.
I did not looked at houses thought.
prices I found started at 500k 2br app
to 2.5mil 3br penthouse
ONLY my observations I was only there 2 weeks
on holidays so I did not spend all the time on house hunting
It has boomed though in last 3 yearsJason
January’s issue of API has an interesting story on holiday rentals. I live in this area and if my memory serves me correct Sunshine Beach has had the highest capital gain over any other suburb on the Sunshine Coast in the last 2-3 years.
Cheers
RickHi Jason I have a property in the Kawana Waters area (not the new development) but the older section which is regarded as “beachside” of Nicklen Way, im my opinion what’s been said about the growth you cannot go wrong except that it is heavily negative if you can sustain that. My home is getting $350 p/w 100 steps to the beach standard 4 x2 bath double lock up, lots of houses being renovated up there as you are buying in an area with limited land so close to the beach. good luck with you search
I have owned a property in Sunshine Beach for 9 years. The rental market here is fickle and one year my property was vacant from Autumn to Spring. Capital growth has been very strong over the past 3 years and the rental market has improved over the last two years. Units rent better in the holiday market.
Jim
Hi Jason, I too live on the SSC (aren’t we lucky). I am involved in holiday rentals and unless you want to use the property yourself from time to time would say there is no guarantee on return. The “peak” times seem to be getting smaller (fewer weeks) and the fees/charges to manage are much higher than for permanent rentals.
As mentioned by other forumers, the capital gain over the last 3 years or so has been amazing and I guess you need to figure out if there is a lot more movement there.
Sunshine Beach is a great spot for holidaying however the tariffs that are asked on some of the properties seem to be extremely high.
Remember from a holiday point of view, you have to pay for the electricity, lawn/garden maintenance (whether its let or not),cleaning costs (which are built into the tariff), linen (if applicable), usually an advertising levy, credit card levy, as well of management fees of approx 12.5%.
Sorry don’t like to be negative however it is important to know EXACTLY what you are up for.
If you are putting in quite a bit of your own $$$ then the outcome could be quite different.
If you have any more questions on holiday lettings, just PM me. Ta and bye for now
Yasna & Simon
Thank you all for your replies. It looks like I have to do a bit more thinking on this one. The business partner was goig to invest with was projecting the holiday rental being occupied 40/52 weeks of the year (approx. 75% occupancy). From the sounds of it though, the more conservative (realistic ??) figure might be only about 40%-50% occupancy. I’ll get my partner to factor in the lower occupancy and see if what the numbers look like.
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