The Hidden Costs of Tropical Property Investments: Paradise Comes with a Price
In the tropical north, weather patterns can trip up the unsuspecting investor, with extra costs on everything from pools and aircon to insurance and garden design
3 min
There’s a lot to think about when purchasing an investment property, and location is often at the top of the list. This will crucially affect rentability, income and ultimately, sale price. Investors also need to factor in its knock-on effect on maintenance costs. And nowhere is that more apparent than in the Tropics.
The Wet Tropics World Heritage Area accounts for the land between Townsville and Cooktown on the north-east coast of Queensland, covering an area of more than 8000km. Within this, FNQ holiday hotspots such as Mission Beach, Cairns, Palm Cove and Port Douglas have become sought-after investment addresses in the post-pandemic era. Ah, the Aussie Tropics! Year- round sunshine, a holiday lifestyle and (compared to our more southerly cities) affordability. So far, so idyllic.
But what else do you need to know before you put down that deposit? Here are some of the ongoing costs involved in investing in a tropical dream.
Growing pains
Most landlords in the Tropics include regular garden (and irrigation) maintenance as part of the monthly rent. Mitch Sullivan, horticulturalist with Papillon Landscapes and Construction, works on properties in Cairns, the Daintree and everywhere in between.
“Anyone who’s been around long enough, knows how hard it can be,” he says. “People from down south often aren’t aware of the rate at which everything grows. If you don’t have the knowledge, or the time, it can get away from you really quickly.”
And if you have paying guests, you need to keep your corner of paradise in tip-top shape.
“Occasionally you may get a tenant who says they want to look after the gardens but that usually doesn’t go too well,” he says.
Landscaping companies charge from around $120 for a fortnightly service, depending on the size and scope of your block. It’s always good to get a quote upfront.
Keep it covered
Extreme weather patterns all over Australia in the past few years have made it clear that adequate insurance is a no-brainer. And when you’re buying property in a region that’s at risk of cyclones for six months of the year, it’s especially pertinent. According to financial comparison site Canstar’s calculation of average annual home and contents insurance premiums across Australia in 2021, North Queensland’s premium more than doubles the Queensland average and approximately triples the other states and territories (except NT). While the risks are minimised by the fact that the properties are built to code — ie to withstand a cyclone — it isn’t a foolproof system, and the wise investors will have their properties checked prior to cyclone season for signs of deterioration.
How’s the humidity?
With winter lows at around 25 degrees and hot, humid conditions in the wet season, aircon is a must. Jason and Anne Moore (pictured below) are resident managers at Freestyle Resort in Port Douglas, where air conditioning is a responsibility of the individual apartment owner/investor.
“Aircon units have a relatively short shelf life here because they’re almost constantly in use,” says Jason. “They often don’t outlast the warranty period so it’s something else for buyers to factor in.”
Humidity is also responsible for mould, which can be a major issue in the tropics, especially if a property is left vacant for periods of time during the wet season.
“If you leave a place locked up for eight weeks you may well come back to find it’s turned green,” says Jason. “Once it’s in, mould is not easy to get rid of. Removal is an expensive exercise.”
In the swim
Not every property has a pool but it’s one of the most popular add-ons for a rental in the Tropics, so let’s assume your investment has one. As with gardening, pool maintenance is generally built into the rent. Holiday makers expect a pristine pool, and you probably don’t want to trust long-term tenants to maintain the chlorine levels and keep the filter running.
Daryl Taylor owns and runs Happy Pools, servicing pools from the Northern Beaches of Cairns northwards up the coast.
“Most landlords have a pool maintenance service,” he says. “It makes sense up here because people swim pretty much all year round, so you need it to be operating perfectly. In the wet season, we get an enormous amount of rain, and this dilutes the chemicals and washes the garden into the pool.”
Happy Pools offers different tiers of service for rentals from monthly and fortnightly regulars up to several times a week.
“Holiday properties need more attention because guests are in the pool a lot — people are leaving beer bottles around and kids are weeing in there — so we need to service it between each booking.”
Expect to pay around $45 (plus chemicals) for a fortnightly service, depending on your pool.
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
Prepare yourself for the year of the peach
2 min
Pantone has released its 2024 Colour of the Year — and it’s warm and fuzzy.
Peach Fuzz has been named as the colour to sum up the year ahead, chosen to imbue a sense of “kindness and tenderness, communicating a message of caring and sharing, community and collaboration” said vice president of the Pantone Color Institute, Laurie Pressman.
“A warm and cosy shade highlighting our desire for togetherness with others or for enjoying a moment of stillness and the feeling of sanctuary this creates, PANTONE 13-1023 Peach Fuzz presents a fresh approach to a new softness,” she said.
The choice of a soft pastel will come as little surprise to those who follow the Pantone releases, which are often a reflection of world affairs and community mood. Typically, when economies are buoyant and international security is assured, colours tend to the bolder spectrum. Given the ongoing war in Ukraine, the Israeli-Gaza conflict and talk of recession in many countries, the choice of a softer, more reassuring colour is predictable.
“At a time of turmoil in many aspects of our lives, our need for nurturing, empathy and compassion grows ever stronger as does our imaginings of a more peaceful future,” she said. “We are reminded that a vital part of living a full life is having the good health, stamina, and strength to enjoy it.”
The colour also reflects a desire to turn inward and exercise self care in an increasingly frenetic world.
“As we navigate the present and build toward a new world, we are reevaluating what is important,” she said. “Reframing how we want to live, we are expressing ourselves with greater intentionality and consideration.
“Recalibrating our priorities to align with our internal values, we are focusing on health and wellbeing, both mental and physical, and cherishing what’s special — the warmth and comfort of spending time with friends and family, or simply taking a moment of time to ourselves.”
Each year since 2000, Pantone has released a colour of the year as a trendsetting tool for marketers and branding agents. It is widely taken up in the fashion and interior design industries, influencing collections across the spectrum.
Consumers are going to gravitate toward applications powered by the buzzy new technology, analyst Michael Wolf predicts
Chris Dixon, a partner who led the charge, says he has a ‘very long-term horizon’
