Hi Phlang,

I would be wary of investing in any area which is predominantly a mono-economic region e.g. mining

I believe you always need to consider a good exit strategy before entering into investment property and you limit your options in such an area.

Tommygun has lived there so I'd respect his opinion.

Much better to invest where there is a vast diversity of employment etc.  We always invest close to schools, transport, shops, employment and infrastructure.  

My wife and I have been investing for some time now and  this basic "rule" has worked a treat for us.

Invest with your head not your heart – save that for deciding where YOU want to live.

all the best.

They may be fine, however here's something to consider:-

They guarantee a percentage return based on sale price for a set period of years.  Have you ever wondered how they manage to continue with guaranteed payments to you during the guarantee period if this time also coincides with a decline in say tourism?  

It is fair to assume that there is a decline in visitor/tourism numbers at present because of GFC, growing unemployment etc – agree?

I would be seriously considering this as a non- investment product.  Just ask any lender at the moment how much they are prepared to lend against this type of investment – the answer may shock you.  The less they lend the higher the risk to you.
 
Generally these apartments have the rental guarantee built into the upfront price to cover the guarantee period.  To guarantee any payments into the future for accomodation type investments when there is no way to guarantee that the rooms will be used really raises some questions.

I agree with andrewbeech above.  Be careful.

and finally to illustrate, here's an example for thought:-

purchase price say $300,000 with rental guarantee of say 7% for 3 years.  (a fairly typical scenario)

The operator has to be paid and all the outgoings associated with such an investment also have to be paid (management fees, rates, maintenance etc etc).  
As a general rule your return is usually around 45% of gross monies received. 
Therefore to guarantee you $21,000 per year x 3 years the gross figure per room per annum must be approx $47,000.  Most of these style of establishments generally are around 3 to 4 star  so let's assume a nightly rate of approx $150.  This equates to approx. 313 nights per annum or an occupancy rate of approx 86% – a fairly high consistent occupancy rate is required considering the amount of accomodation competition in the market place today. 

This may sound long winded, but all I'm trying to say is be careful. 

Good luck with your decision.

Hi roy22

ALWAYS a dangerous practice to try to flip developer off the plan stock.  Developers always tend to "push the market" when they set the price and in the current market situation you may find yourself "stuck" with a property you can't flip.

Suggest you look for good "used" property you can build some value into and then flip if this is your wish.