Ridi,
I applaud your idea but feel it is reactionary to an endemic problem with RIPs of hoping the tenant simply does what they legally obligated themselves to do when the lease was signed.
Of course, many residential tenants aren’t used to being legally obligated, and the lease is simply something you squiggle on before someone gives you the keys.
If you have non-res props, the tenants signing are usually Directors or Ministers of Companies and Govt Depts respectively…and hence when they sign the lease they mean it…and not only are but ‘feel’ legally obligated to conform to all that is written in the lease.
Anyway, the underlying reason why you are offering the Pizza or other incentive, is one of a myriad of reasons why we departed the RIP scene.
Unlike Steve, and similar to surreyhughes19905 but flipped around, I couldn’t give a stuff about the Tenant or their little whinges and problems. They are to punctually perform and duly complete all obligated actions as written and signed off in the lease or they get their **** dragged into court. Sounds harsh – but it works.
Maybe most people will disagree – but then most people don’t deal with tenants like I’ve got.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
Hi Dazzling,
Am I wrong, or did I read you also were having major problems with feral tenants in your non-residential IPs.
Please forgive me if I got that wrong, but I’m sure I read that somewhere in this forum.
I think it takes guts to run a non-residential IP for a number of reasons, mainly that I see many sitting empty, sometimes for months or years. I wonder if the owners are using the empty space as a tax write-off.
Secondly, with three kids (two teenagers) I certainly don’t need any more stress or complications in my life. If guess it all comes down to what you feel comfortable with. I have grown up with my parents having multiple residential IPs and so I am extremely comfortable managing our own.
I do acknowledge that my hesitancy in taking on the purchase and/or management of a non-residential IP would be matched by some people’s hesitancy in managing a residential IP themselves.
I don’t own shares because I don’t understand them enough. It’s the same with property. Go with what you are comfortable with.
I really enjoy reading these posts and do admire what you and others have accomplished.
Regards, Wylie
Wylie,
You are correct..we are having trouble with 2 or 3 feral tenants…however these were inherited as a group of 6 which all came with the purchase of the property. We fully expected to have trouble with some of them and went into the deal with our eyes wide open.
As posted before, they were all on a bit of a casual, verbal, wink and a nod – with not a jot of paper in sight and left to run feral from the previous owners…who were on site and probably the most feral of the lot.
Anyway, we are in the process of signing up the ones who want to ‘stay and play the game’ on a 3 yr structured written formal and signed off lease with escalation clauses and 2 x 1 yr options. We have 2 in the bag after 3 weeks and working on the others. The others who don’t want to ‘play the game’ are having a meeting with the forklift very soon.
When picking up large tracts of land with older type industrial sheds for less than land value – one has to expect some work to get the place ship shape and fully tenanted on legally binding secure long leases. We could of bought much nicer properties with signed up leases…much less hassle and headache, but the initial low buy is where we wanted to make the money.
It’s taken us 3 weeks to get this far and we reckon by 5 months we’ll have the lot sorted – with a commensurate rise in the value of the property of $ 0.4 to 0.5 MM…I can handle a few hassles for that.
In terms of “leasability”, with our big professional looking For Lease board out the front, which cost us $ 220 to rent for 6 months, we have been receiving a steady flow of enquiries…these tradesman and truckies always need an area to put all of their ‘stuff’…for some reason they have so much of it. Great I reckon.
Don’t be scared of non-res props…have a really good look…even though you aren’t comfortable with them now, it may be worth the pain to get up to speed with them…how big is your comfort zone and do you want to expand it ??
This prop is definitely in the realm of Steve’s “find a problem and then find a solution”.
Good luck with your RIPs and managing them yourselves…we do the same and find it pretty cruisy.
Cheers,
Dazzling
“No point having a cake if you can’t eat it.”
You must be logged in to reply to this topic. If you don't have an account, you can register here.
