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.
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OpenAI has shelved the planned launch of GPT-6.1 Astra after internal tests raised concerns about deception and agents acting beyond user authorization, according to The Wall Street Journal. The company says it will investigate the issues and strengthen safety measures before releasing future models.
4 min
OpenAI says it is scrapping the release of its next-generation AI model over safety concerns that researchers raised during internal testing, in one of the clearest signs so far that agent misbehavior could stymie the industry’s rapid progression.
The move follows a summer punctuated by reports of artificial-intelligence systems industrywide going rogue, and marks a rare case of a major AI developer ditching a new release because of safety concerns.
The company had planned to launch the model, known as GPT-6.1 Astra, in the coming days or weeks, aiming for an October debut. The model was more capable than the company’s previous models in completing challenging tasks from end-to-end without human assistance, as well as writing.
The company instead will focus on improving the safety of future models, which it expects to be even more capable.
Saachi Jain, OpenAI’s head of safety systems, said in an interview that GPT-6.1 Astra regressed in two areas. Compared with its predecessor, GPT-6 Astra, the model performed poorly on tests measuring alignment, or how well the model adheres to what humans would like it to do. Specifically, GPT-6.1 Astra showed higher levels of deception: It wasn’t always honest about telling users of the actions it did or didn’t take.
Another issue was what OpenAI calls “scope authorization,” meaning that GPT-6.1 Astra would push ahead on a task without asking the user for permission, and would at times reach for external tools and services even if it might be unsafe.
“For anything regarding safety and alignment, there’s a trade off,” Jain said. “You really do need to find what’s the right line between staying within scope, but also avoiding laziness in terms of how the model actually pursues tasks even when it hits friction.”
While GPT-6.1 Astra improved in areas such as “model laziness,” Jain said it didn’t quite meet OpenAI’s bar for safety and alignment, so the company decided not to launch the model publicly.
The announcement comes one day ahead of OpenAI’s annual developer conference in San Francisco. In the past, OpenAI has used the conference as an opportunity to launch new models and services that reduce costs for software developers—a segment the ChatGPT-maker competes with rival AI company Anthropic to win over.
In recent weeks, OpenAI and Anthropic have called on industry partners to slow down the development of cutting-edge AI models and invest in safety standards, noting they will temper the pace of their own internal AI progress.
OpenAI says it is working to investigate a range of agent security incidents that it has discovered in recent months, and address the safety issues underneath them. As part of the work, the company has implemented a new monitoring system to catch AI-agent misbehavior more quickly, and started requiring engineers to use stronger security guardrails for testing its AI systems.
Earlier this summer hundreds of OpenAI’s internal agents, which were tasked with completing a cybersecurity test, ended up hacking into the AI company Hugging Face. Since then, high-profile organizations such as the Australian government and United Nations discovered that OpenAI’s agents used similar, but less extensive, techniques to gain access to their websites.
Many of the publicly known agent-security incidents involved OpenAI’s internal AI models that were never slated for public release.
Last week, OpenAI said it paused training on its most capable AI models after an AI agent slipped through a gap in the company’s internet restrictions to query a public chatbot. The company said its new monitoring systems flagged the incident within 15 minutes, and training on these models remains paused.
GPT-6.1 Astra isn’t one of those models, but a different case, the company said.
“We want to make sure our model development is safe no matter whether that’s in the company, or when we ship it to users,” Jain said. “But when we ship it to users, we have an extremely high bar in terms of safety and alignment.”
While the company decided not to ship GPT-6.1 Astra, it hopes to use the same base model to do additional reinforcement learning runs, and create future generations of its GPT-6 models.
OpenAI plans to conduct several deep dives to identify the root cause of the problems identified in GPT-6.1 Astra, Jain said. The work includes ensuring that OpenAI’s reinforcement learning environments are rewarding the right type of behavior, Jain added, though she noted the company would investigate all stages of model development.
AI companies have begun to draw scrutiny from policymakers and public officials, who are paying attention to the rapid development of the technology. Later this week, a Senate subcommittee is holding a hearing with third party AI researchers titled, “Rogue AI: Securing the Homeland Against AI Agent Attacks.”
Florida Attorney General James Uthmeier, a Republican, sued OpenAI in June, claiming that the company and Chief Executive Sam Altman knowingly released an unsafe product and ignored warnings that it could harm users.
In a motion for temporary injunction filed Monday, Uthmeier sought to prevent OpenAI from developing new AI models without third-party approved safeguards, stop ChatGPT from soliciting user engagement and limit the company’s ability to advertise ChatGPT as safe.
Tech companies claim they “cannot stop barreling forward with their potentially civilization-ending endeavors unless they are forced to do so by the government,” Uthmeier said in the filing. “The Florida Attorney General is answering your cry for help.”
An OpenAI spokeswoman said that people want to know AI is being developed safely, “and that starts with what companies like ours do ourselves.”
“Governments have an important role to play in setting robust safety standards for AI, and we’re committed to working with Florida and other states on advancing pragmatic AI policies that apply to the entire AI industry—not just one company,” she said.
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