Is Comercial Property in Cairns the way to go?

Hi everyone,

as you can see it's my 1st post as I am new to the whole property investment scene. I'm from ACT and I want to ask the opinion about a Comercial (Hotel Suite)property in Cairns City:

Price: $267K
Guaranteed return for 1st year of 5%
Guaranteed return for 2nd year of 6%
Guaranteed return for 3rd – 5th year of 7%
Guaranteed return for 6th – 10th year of minimum 7%
No management fee

Costs per annum
Total: $5000 costs per year in body corporate and council rates

Is it me or is the deal a not too good one, banking on a hike on the property? There is a 10% deposit on the place and it will be due for completion in 2010. This is the 1st property I am buying….and I'n not sure about the figures. Cairns seems to be really trying to develop and attracting more investors and people to relocate there. However, would hotel suites really appreciate in value over time?

Also, about FHOG, is it true that as long as you buy properties, but do not live in it, that you are still entitled to the FHOG when you eventually buy your own house?

Thanks