Airbnb Investment in Cairns: Strategy, Property Selection and What 25 Years of Local Experience Teaches You

Welcome to Property and Mortgage Insights Australia 2025. I'm Virginia Grahame, your host and also a mortgage broker. Today we are going to talk to Linda from Property Ladder. Linda is one of the most experienced rental managers in the Halle of Cannes. She's an expert at Airbnb.

Welcome Linda from Property Ladder. Thanks for joining us today. Thank you. Actually, let's go deep dive then into the Airbnb. So where would you like ve is looking in Airbnb?

Where would they look at and why? Okay. So for us personally, we don't like buying a property that's in on site management and that's for multiple reasons. Generally speaking, when you've got on site management, your body corporate is much, much higher because you're paying a fee for that management service. They're also from a lending perspective, harder to get borrowed.

Again, sometimes they reduce the lvr. Yes. On what you're allowed to. Yeah. If it's strictly in a leading pool or a property that's only letting.

Absolutely. So that's one of the reasons. The second thing would be location. So when somebody flies into Canirns they're going to either want to hire a car or they're going to want to do tourores. Generally somebody that doesn't want to hire a car will want to be in the city and generally within two kilometres at the very, very most.

So you need to draw your little map if you're going to buy somewhere out, say Whfield. Whickfield'beautiful but you need a car. So somebody has to have that added cost of car hire, which car hire is quite expensive at the moment. The other areas are the beaches. So there's, you know, there's all the beaches along the coast that do have properties there.

But then somebody will have to hire a car and it's a different type of holiday. So what I tend to find with the Canirs market generally is that they will come for between two and two and five days. Three days is sort of like the average. They fly in, they do the Reef, they do the Skyrail, they do the Dane Tre and then they're off. They've ticked, you know, the things off their bucket list for that.

They do like staying close to town and again it depends what, what you want to invest in. So we invest in smaller budget pet friendly because pet friendly is a big thing. Accommodation that's close to the city. If you want to go a little bit more upmarket, you know, there are places like Kun which is four kilometres from town. But it does have it is a gated community and it does have gorgeous gardens and amazing pools.

But the cost of the buying it and the cost of keeping it is much, much higher. Yeah. And also probably running at cost more too. Yeah, yeah. Because if it's a two bed, two bathroom with four aircons, it's going to cost you a lot more electricity than a one bedroom with one air con.

Yes. So there is that running cost. Yes. And so with the furnishing of the Airbnbs, when you run them, do you furnish them the same? Like would you furnish the one in that one or does it require more furniture as well?

Becausee it's got a pool. Would you have it po po or something? Would you have other stuff as well? Generally no, generally we't don't provide the extra stuff. We might provide a beach towel.

That's about the only difference, you know, because generally it's they're out and about furnishing them. My philosophy always has been I would rather buy the best that I possibly can but anticipate that I have to replace it in two to three years. So rather than buying a beautiful leather so far with all recliners and all the bells and whistles for $10,000, I would rather buy the diamond sofa pair for $1,500 and expect to bin it after two to three years because there is still that wear and tear, you know, and you do want the property to be presentable. Same with mattresses, you know, you can buy, you know, a mattress that's you know, $1,000. The I tend to go not the budget but above the budget to the middle.

But do expect to basically turn it around and refresh it every couple of years just to keep that niceness about it. Yeah. And what about things for the fridge and all that sort of thing like how would you furnish what sort of food would you leave any woman? Everybody has a different way of doing it. So we personally like having the things in there that we would want.

So you know, I'm a big tea drinker and I take sugar and I love milk. So therefore, you know, I put a liter of uhta milk in the fridge. I put big container of sugar, big container of tea, you know, coffee, all those sorts of things. I also have, you know, things in the cupboards like aluminum foil and they're all just little things that can just make that state that's still budget great. You know, people don't have to go o gosh, gott go't find it, you know.

So yeah, and just Furnishing it for us nicely. You know, mirrors are great. I love mirrors. Girls don't like it becausee they to clean them all the time. But I love mirrors, you know, Big G.

It bounces that thing. People always looking at themselves. You know, it's better than a painting. But, you know, just making it feel like a home is super important. Yeah.

There's something about when I look at them online, they do look very. There's something very inviting about it. Very cozy almost. Even though you're in the tropics. Yeahah I was looking at it.

Yeah. So Airbnb has changed over the years. You know, 10 years ago when we started, nobody really knew about Airbnb, you know, but now it's out there, it's mainstream. You know, it is a way that people are booking holidays and they want that experience they don't like. Especially if you're traveling with a family, you know, you don'tn to have to book three hotel rooms.

You, you know. And do you see it continuing or do you like. I know you can't. You don't know if you're sure what will happen next sort of thing. Do you think the rules will change or do you see it continuing or what do you think will happen with Airbnb for Canirns itself?

I do believe that it will continue on just for the fact that it. We're at capacity already, you know, like we're pretty much fully bookedt all year round, even in the low season. So if you take that Airbnb accommodation component out of the Cairns market, the question is then where are the tourists going to stay? And if the tourists can't stay because there's no accommodation, they will then bypass Canirns and go somewhere else. The flow on effect of that is that if you don't have the tourists here, the boat's going to the reffund fall.

So therefore businesses will struggle, people will lose jobs. So do I think that, you know, there may be slight changes? Possibly. But generally I think Airbnb is part of the fabric of tourism. For cans.

Yeah. So there's the Airbnb. So if there's not enough accommodation for the tourists or for the people here merely or for anyone, is there any plan to build anymore? There may be plans, but I't. I don't actually see like anywhere, you know, everywhere is struggling for accommodation or, you know, somewhere to live, but I just don't think that there's the ability to do it because the cost of labour, you know, the cost of like just my Handyman has doubled, has that doubled in price, you know, and cleane as in cans, and cleane as in cans.

Everything is doubled as far as labor goes. Then you've got the cost of materials, you know, that's all doubled. So, you know, you'd be a very brave builder to be able to put everything that you have on the line to go out, borrow the money, hope that you can get it done on time, hope that you can get the trades that you need, hope that you can get the materials that you need and then basically make a profit, you know, so you'd be a pretty brave builder. Like I. To give you an example on cost.

So I upgraded some shower screens recently at a property that we were selling and it was just a single, single door and it was a three piece slider and it was, it was built for that area. I didn't get it off the shelf. And the cost was from memory about $350, which I thought was, which, okay, you know, it was okay. It was nice quality. So I said, okay, well we've got all these other units in this building.

We'll get all the others done. Well, the manufacturer of the glass went broke and they got another supplier. And the cost of that exact same shower screen now is $700. Do you know, say so when you put that into trying to build housing, you know, a builder could potentially have everything double and may not be able to finish the project. So I'd love to think that there would be.

And when it's going up by that much, there's no. And their profits's only 10% usually anyway, or maybe 20 at the most and the cost price and the material doubles. It just puts a. Absolutely. Yeah, possiblye do it.

Yep. Yeah, absolutely. I know that, you know, in our Airbnb and also our rentals, you know, there's things that we would like to do, but I'm thinking I just can't justify it. I just can't justify it. You know, putting in the new kitchen, you know, it's, you know, you would think it was a fairly simple, straightforward thing, particularly now that Bunnies has such a good range with like the caboodle range.

But then it's the cost of the materials and then the delay. So, you know, if you don't have all your ducks in a row, it can blow out, you know, four, six, eight weeks with no rental income and then the actual cost of it. So, you know, I know that in our business we certainly are holding back, doing a lot of upgrades. Yeah, that's Good to know. Yeah.

And so if someone wanted to buy something for Airbnb, where would they, what would they buy? So you reckon within a kilometer of the city and then would that, would it be then be a unit, do you? Yeah, yeahits are great. I mean there are lots of people that, you know, have houses. I don't like doing houses rental or Airbnb because it's just particularly in the tropics, there's just so much external work.

And if you're doing an Airbnb, you know, really you would have to have somebody come and service the pool weekly, you know, whereas you can stretch it out to a month because the tenants'there and they can look after it. Gardening, you know, you know what it's like here. You can watch the grass grow in the wet season and the weeds. So, you know, if you're going to have an Airbnb and you've got a house, you've got to pay extra services to have that place looking really presentable. That's why I think units are fantastic.

You could buy, you know, in an ordinary block. There's one on Grafton street at the moment that's up for sale. It's just a basic block built in the 80s. Two bedroom, walking distance to town. Probably pick it up for about 300ars 50.

You could Airbnb or you could, or you could rent it out for around 450mark. I'm gonna have to buy that long. Not many.

I. I have to take it out of the podcast Nowe. Yeah, I mean Airbnb is a great tool, you know, has it accelerated our personal journey and our personal.

From here to where I want to be financially, 100% like, you know, some of the, some of the nightly rates that I get, you know, in peak season. So peak season for canirs is everybody else's winter. So end of June through to the end of August, you know, for a property that we have on Grafton street and I'm getting one do 90 a night, you know, which is just fantastic, you know. So has it accelerated our personal journey? Absolutely.

Would I be as far ahead in our retirement strategy as I would if I didn't go down the Airbnb route? No, no. Has it been difficult? Oh, good Lord. Has it been difficult?

You know, just. Yeah, it all things that go wrong. Oh, gosh, yes. You know, like so in the Airbnb, apart from making it beautiful and home, you have to. O gosh, how am I go goingna say this night nicely.

You have to allow for people with no common Sense. Absolutely no common sense. So, you know, on the screen door, as you walk in, I've got a big laminator thing. So as you walk out, it says, have you locked the door with a key for your safety? Common sense on the back of the door.

Have you locked the door with a key for your safety? And yet they still leave it unlocked and wonder why they get broken into. So, you know, or, you know, I could just. Yeah, the common sense is really hard. But do I put up with it?

Yes, I do. Because the rewards, the financial rewards are there. 100%. Yeah. And so what's.

What do you think is the best thing to do then? So you think by some Airbnb, by some. Like what strategy? Just so I understand it, what strategy does buying the different things feed into, as it would. You've got to have a plan and it feeds into your plan, you know, so if your plan is that these are going to be your passive income, you have to work out how they're going to be your passive income.

So if you need, you know, $3,000 a week, neat, after everything else, you have to work plan how to get that passive income. So you buy according to that. So for us, in the past, we bought things that we called our debt reducers. So it was a property that the price was just so good that you couldn't say no, but it was never our intention to keep it. So we had a property, two properties actually, that we bought on Robert Road many, many years ago, and we bought them for probably 25% of what a comparable one was going.

Nobody else was buying it. The bank would lendnders the money. So we went, yeah, let's have a go. So we did. And we use those to basically propel our investment strategy along.

And recently we sold them, which meant that we made the profit. We sold it, which meant that we could keep something else. So you've got to have a strategy on how you want to do it. You know, duplexes are great. You know, if you get a good set, you know, you could get potentially over $900 income a week, you know, so that's a great, great return.

But you've got to have a strategy. And what works for me might not work for you. Yeah, yeah. So if people wanted to say retire. Yep.

How do they retire with Airbnb? Or is that not part of the retirement strategy? Because. Because the income's so unreliable. Like, you never know what you learn from that compared to, I guess when I'm looking at it at an Airbnb investment In Canirns, I have to make allowances for the fact that probably from IND November, you've got that short window between Christmas and New Year and that first week of, you know, January, that's good.

But pretty much apart from that, from November right the way through to Easter is what we call our low season. So, you know, the income is going to be less. But then from April to June it's pretty good. But from June to August it's amazing. And then from August to November it's good again.

So when I look at it, I look at it as a whole, I average out the rental income that comes in as a whole. And if that was going to be and it is our passive income, I look at it as a whole. So it's the income in total over the year that comes into us. And also what I'm thinking too is if you're a younger kid and you didn't mind not living them in one year, bought and you are happy to do cleaning, a bit of work, you could run your own Airbnb, get the money for the cleaning of it as well. Absolutely.

While you're making the money from the actual Airbnb yourself. Yeah. So a lot of people do Airbnb differently, just as they do with anything else. Any anything else. Everybody has their own thing on it.

So for me, cleanliness is one of the most important things. So I know that when you stay at a hotel, the girls might get a very short window to come in, zoom around with a vacuum cleaner, change your sheets, change the thing and zipp in and out. For me, cleanliness is one of the most important things. So for a two bedroom apartment, personally I allow two hours for the girls and that's to, you know, if somebody's left it clean, they do the spring cleaning. You know, if they've left it dirty, they get it back to where it was.

So a young person that buys a place, absolutely, you get paid or you can charge a cleaning fee which you then would keep, do the work yourself. Great investment. Got me the right one.

Do you have full time cleaners then for all the properties or do they. So I have a great team that's behind me. So we have at moment, I think about seven people that work with us. It is. They normally start anywhere, depending when the people leave.

From 6:00 in the morning until 2:00. Check out generally is 10:00 and check in is it two. So I have a four hour window. I do a same day turnaround. A lot of people do a Day between.

But I figure that our are small. If I've got the team, I can get in, I can get it clean, I can get it prepared and ready for the next guest. So if somebody is buying it as an investment, particularly you live here, great, great investment, you know, because say for a one, a one bedroom apartment, we'll use a one bedroom apartment. The clinic fee I charge is $100, you know, so not only would you get the income that comes in for the nightly stay, you would get the income for the cleaning. Yes, it is hard work, but investing is all about hard work and sacrifice.

Well, also if you're, you know, want to have a job and you're a kid and you've got enough money and time to do it. Yeah. It's not, probably not that bad. It's not like they usually get that dirty anyway. Yep.

Is it? No, no, no. They're only there for a couple of days. Yeah. One of the things, as an investor of residential properties and an Airbnb, so I'll put them side by side.

So I have a residential unit that I've gone in, I've put new floor coverings down, I've painted it and it's nice. It's still a budget place. If I have a tenant that is in there and they have been there for five years, I now need to start looking at what I need to do to improve it, replace it, repair it. So a tenant generally is much harder, we're talking, generally is much harder on a property when they're living there full time. Yeah.

And that's because they're cooking. Yeah. You know, they're living, they're living, they're living there. They're physically there. Exactly.

You know, they have a shower every day and they might not blitach it every day and do, you know, so there is that usage. Whereas an Airbnb, you know, we've got the ones on Grafton Street. We went in there and we basically went and we painted them, we changed the lights, changed the fans, updated the furniture. I can walk back in there four or five years later and it's like I walked out the door four years ago. Oh, wow.

Because the wear and tear, generally speaking on an Airbnb is so much less. Just think about it. When you're, say when you go to Sydney and you go to a hotel room, how much time do you actually spend in an hotel room? Yeah. Not very long.

And you certainly would never mark the walls or. No, you know, not on purpose, obviously, but you know, when you live somewhere, you Accidentally do just because you're physically there. Correct, correct. So from an investors's point of view, Airbnbs are great because they don't have that wear and tear. Yeah, they still have some, but it's not too much.

It's more like you have to refurbish them more than any. Correct. It's almost like a hotel room. Yes, yeah, yeah. You just have to make them fresh.

Yeah, yeah. Well, that's good. Well, you've convinced me to buy an Airbnb and I think, I think everyone should have one now. Yeah, look, that they're a great investment strategy. They really, really are going back to the Cairns market.

So I think that the Canirns market is. Still does have legs. I really do. And the reason that I do think that is that when you look at it comparatively to what you could buy for in Sydney, you know, or in Brisbane or in Perth, you just. You get so much more for your money here.

Yeah, definitely. It's about half. Yeah, yeah, yeah, about half. I was talking to Janennitor about the luxury of the market and that's the same there. Yeah, it's at least half.

At least what it is then what? The same thing. The comparable thing would be anywhere else. And it's the same in units. It's the same thing.

The only thing that's different I think is that the income from the units is much better. Like you would pay 800 for a house, you know, in Sydney. Like it would cost you probably about 800 to 2000 do per a house there. Like you don't get much more rent for what year? I guess it depends what area you're in.

Sydney they're talking actually the Central coast, which is Sydney. No, like. But the houses there cost more than here. Yes. Now they didn't used to.

Ye, well, they always did actually. But now they went up and then this area doubled in the last five years too. Yep, absolutely. Absolutely. Look, the rental returns in Canirs are really good.

Know, they're still really good. They're still really good. You know, I would have never thought that I'd be renting a two bedroom apartment with white goods in Menanda for 420, but it's just come off. I do have a question though. You know, with the recent crime and problems, that's one of these suburbs that's being mentioned in that sort of thing.

Do people say there's problems with that or is it again those other streets or. Because I know people will ask me. Did they ask you? No, they're just targeting Everywhere. Yeah.

So it may have originally started in Menanda Menorah, but they're everywhere now. Yeah. You know, and it's really, really sad. You know, I live on acreage out of town, you know, and for probably the first 20 years, we didn't even lock the door. You know, you just like shut the door and walk out the door.

And dad came and he say, you know, he'd visit from Perth and he goes, where's the caselina for the car? I'm like, well, where do you think dad are in the car? You know, it was that, it was that. What's the word? Safe, Safe, naive, whatever you want to call it.

Whereas now, you know, we've had to install security gates and you know, just be a little bit more proactive. Yeah. You know, it is unfortunately everywhere it is very much opportunistic and if you're not locking the doors, it is very much opportunistic. Yeah. So with the running.

So we've talked about the Airbnb, we've talked about the units and cans generally. So overall, it does all come down to your strategy, really, doesn't it? It does, it does. You know, the best piece of advice I can say is you need to know where you're going before you start. Yeah.

You know, and with you were re also saying that you've mentored some young people through it too. So what were the examples there? So we, there was a young couple that basically were actually tenants of ours and I just said, you know, start low, start small, buy a little one bedroom. And they did, they bought one bedroom, they got in there, they renovatedselves. What work they couldn't do, they got somebody else.

And then basically when the equity was in there for them to be able to support not only that loan but another one, I'm like, okay, we'ren toa start looking for another one. So they then bought a two bedroom apartment and then they rented that one out. Then they cookie cutted it. They basically did the same renovations, made it all beautiful. I said, okay, well you've got now got equity again in this one and this one.

So you've got two lots of equity and they ended up buying a duplex half. And then they've done that again and they've got the extra income. So they've now got three income streams coming in. So with all things they did, did they keep. So they kept the other ones and they just got the equity increase by the revaluation y they just recently sold one of them just to bring down the debt.

Level on their personal place, which is okay. That's okay. But they've got a strategy. They've still got the other one. They've still got the income there, you know, so start small.

But you've got to know. You've got to know where you're going. You know, everybody goes, I want to retire and whatever. But okay, how much do you need? You know, that's.

That's the question. So be honest with yourself. A lot more now that I have a boat. Yes. It's not.

It's not even a big boat, but it's so expensive. Yeah. I had no idea. Everyone said to me, oh, you know, when you get a boat, the best. It's the best day of your life.

And the second best days is the day you sell Iticking. Every week it's something. Yes. But you go out to the reef and then you're like, oh, now I. Yeah, So y.

So I need to. So boat stands for properties. Bring out another thousand. Yes, Ye. Literally.

Literally. Yeah, yeah. And the other thing too, which the people around here say, because we've actually got quite a small boat and a lot of people around here say, you know what, though? The bigger the boat. The morocau.

Yeah. Like for petrol for everything. Yeah, yeah, yeah, absolutely. So many people, they all want that dream of retirement. They want that dream of freedom, you know, they want that dream of it doesn't matter what it costs.

I'm going to do it, you know. But you have to have a plan. And I guess that's the biggest thing I want to convey is you have to have a plan and you need to know how you getting there. Like, for me to come here today, I haven't been here before. I needed to know where I was going and how I was going to get there.

And it's exactly the same with your retirement strategy. You need to know, how much is it going to cost me to live? What do I want to do? How much is that going to cost? Then you've got that fat factor, you know, the things that don't pop up and there's.

Except for you, you're not allowed to ever retire. I don't think I will, actually. I'll just keep ticking along, ticking along. Because everyone. You're doing everyone's properties.

Yeah. No. No one could survive without you. No one else can retire if you do. No.

No. So what will you do? Oh, look, yeah, we've got a nice life, you know, and that does come down to a lot of sacrifice that's come along the Way Ye. I'm not going to say that I, you know, I don't have the nice things in life. You know, I do have the nice house, I do have, you know, house at the table ends.

We do have the nice cars, we do have the nice holidays. But that's come with sacrifice and hard work and investment. Yep, 100%. That's how. That's all it's come along, you know, so you've got to know where you want to be and how you're going to get there.

Yeah, for sure. And I think that, I think some of it's luck to like, to a certain extent, lucky I met you. Yeah, it is luck as well. And you know, some of it's. But I think you did definitely hard work and luck.

Ye. And you getuck you get a lot luckier the harder you work and the more you plan. It's true. And also with the cans market, because I know cans y. It's knowledge.

Yep. Do you know? And if you don't have that knowledge, you need to learn that knowledge. So this friend talk, someone that does. Yeah, yeah.

So that friend of mine that we just bought that unit for, she would send me properties and I'd be like, no, no, no, no, no. But I would explain to her why was a no, you know, so on the surface, you know, at the moment there's quite a few that you go, wow, that's really cheap. No, it's not a good investment, you know, so you need to know the. You have to have that knowledge. Yeah, you do, you know, like City park, fantastic investment.

Scottsdale next door with this friend of mine bought. Fantastic investment. You know, money's in the body. Corporate leves are really low, rents are high. It's, you know, best block place.

It's, it's fabulous, you know, Whereas there's some others that you go, that's a problem. Yeah, I run everything by you. I think you have to though, because you need like you've been in this area now for 20 years. 25. 25 years, yes.

So, I mean there wouldn't be many people that would. No one like you do. No, no.

I like to convey things by stories. So you mentioned the word luck. Right. Was I lucky to be here in 99? Yeah, yeah, I guess.

It came up on the boat. Yeah, it came up on the boat, yeah. Was I lucky that my next door neighbour came over and said, I've just bought a unit and it was like 34,000 luck. Absolutely. Were there as many other people in Canirns at the same time.

Yeah, 100%. But did they all go out and hock themselves to the eyeball for with a debt of a small nation to go and buy these things? No, they didn't. So luck has a part of it but it's that sacrifice that, that and that risk. And that risk.

Yeah. You taken risk. Risk. You can't get anything if you don't take the risk. No.

And people want risk free things or to blame someone else if it doesn't work out or whatever. But you've got to be in it to win it too. Like you've got to take the risk and learn, take a risk you can afford to take and buy something you can afford and then you can go from there. Like you cor from. Correct.

One of the things in the exit strategy that we have is a lot of people go, well don't you want to be completely debt free? Yeah, of course, I'd love to be debt free. But I'm more than happy with, you know, some debt. Because the way that I think about it is that for me to be debt free I have to sell this many of our properties to clear that debt because I'm never going to pay it down individually. So therefore I have to sell those properties.

Once I sell those properties, I lose any potential capital growth, I lose any income. So basically I'm using the bank's money to double my money. Yeah. To leverage it. Ye, yeah, to leverage it.

You know, and lots of people don't understand that. So good debt, bad debt. Is that a good debt? Y. It is.

So long as it's in the right debt. Yeah. And as long as you're comfortable with it, you know that. Correct. The leverage that you're doing and you know the risks you taking and when it's spread across so many properties too.

The risk is definitely reduced. Absolutely. As well. So I think it's. I mean that's why banks lend money.

Yes. Is for exactly that reason. Because you get the leverage that you wouldn't have got yourself. Correct. Yep.

That's why the m morage broken really. I guess as if people had the money they wouldn't need me. But they wouldn't. So. Yeah, no, it's.

Well, thanks so much Linda, that's been so helpful. My pleasure. I said we'll definitely have you back on the show. Thank you. We should have a calling in thing where people can ask you about property or something.

Sure, I can do that. But no, it's fantastic. Thanks so much. My pleasure.