HI All,
just wanted some advice on the new apartments about to be finished in Cairns, Trilogy on the Esplandade?
We are from Perth and my parents have recently been to Cairns and thought the apartments seemed like a good investment.
They are priced at $535,000 for a 105sqm 2 bed apartment.
Apparantly they are 70% sold already. It is going to be a resort so you can have your apartment managed and the rental income is split 60% owner, 40% mangement company.
From what i have heard, Cairns has more tourists each year that most places elsewhere Australia.
I have not been to Cairns, but the rest of my family have been and they feel that the property prices are reasonably affordable, and are perhaps due for a bit of a boom in the coming years?
The fees are $5800 a year for corporate fees and rates.
I am becoming very sceptical about these, and i worry that my parents are making a quick decision due to being caught up the excitement of it all. I try to raise issues and talk about due diligence, but "the guy on the phone says they are a good investment". I am worried.
more info is at http://www.trilogyontheesplanade.com.au
All your advice is valued.
Thanks to all
Lyndon
Hi Lyndon,
You are right to be worried as it seems like your parents have based the decision on these apartments being a good investment because 1) The RE Agent says so! and 2) they liked the area while visiting on holidays!
The worst reasons to buy real estate!
I have a 2 bedroom unit in Cairns that is currently valued at $125k, so $535k sounds a lot to me, mind you, my unit is not on the esplanade and is 5 mins away from CBD.
I guess what your parents need to ascertain is the REASON for the purchase. What is their strategy? What would happen if there is an over supply of these apartments and there are no tenants for them? Can they afford the payments?
They must understand that a rental guarantee from a RE agent is not worth the paper it is written on, so they are really just guessing what the income may be.
The other thing is glossy brochures and websites scare me! (If it looks too good to be true, then it usually is!) Mum and Dad investors usually get caught out in these apartment situations (Gold Coast anyone?)
HAVING said all of that, Cairns is a growing economy with low vacancy rates for tenants. There are new flights starting in August going to Japan and also the airport is being upgraded. The population is growing too…
Many things to think about, but you are right with the due diligence, it must always be carried out, otherwise you are running a huge risk.
This is a tricky one, as some parents just cant be told!
Good luck
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