Nest predation rates often depend on how well a nest is concealed. Many tropical birds build their nests over water and/or build large pendant nests that closely resemble clumps of vegetation or flood debris, behaviours that are universally assumed to reduce nest predation rates by deterring or confusing nest predators, respectively. Yet this hypothesis has never been tested. In tropical Australian mangroves, Large-billed Gerygones Gerygone magnirostris typically build their pensile nests over tidal channels and often next to their old nests. We monitored the fate of nests of 28 pairs and used generalized linear models to investigate the importance of nest location to nesting success. Nest failure due to tidal flooding, but not predation, decreased significantly with nest height and distance from the tidal channel, suggesting that nesting over water does not always reduce nest predation, and, indeed, may incur costs through flooding. However, nest predation was significantly more likely at nests that were distant from old nests than those built close to old nests. Nest predators might give up searching for eggs or nestlings if nearby nests are empty (potential-prey-site hypothesis). Alternatively, gerygones may build near old intact nests because they signify 'safe' locations that have escaped nest predation in the past.