Hey Everyone,
I found this wonderful Prop near me and its selling dirt cheap, the only catch is by court order, the tenants only have to pay a $1.00 a year in rent!
Has anyone seen this before?? If i were to obtain the property is there anything i can do to get them out or rasie the rent??
Cheers!
never heard of that before when does there lease run out. and how cheap is dirt cheap.
Hmmmmm……….first thought was firebombing, but damm that would effect the property……..but then again how much insurance do you think you could get on it, it could be a real win win……
Thats what i’m thinking, I’m gonna head down to the Real Estate Agents to get details. I’ve never heard of it before either, but i don’t want to let it escape if its good!
Its about half the price it should be, and its fairly new!
Plus i reckon i could put a good offer to knock down cheaper, make it well above 10% Gross yielding..
Will post back shortly after speaking with the estate agents.
is this resisential or commercial
I have heard of this before, normally with a $1 rent, there is a clause that it is in place for 99years and includes that the tenants are fully responsible for all the upkeep and maintenance of the property.
In the case I am aware of, it was for a government building in Perth city and it was severely in need of repair and renovation. It had to be restored to the heritage listing requirements. It may still be available (Old Treasury Buildingoverlooking Supreme Court Gardens).
I would read the small print very carefully
10% yeild, you would want more than that. 10% you can find with no problems
Well I spoke to the Agent,
Apparently the people in the house are in their 70’s and through the courts got a lease till the year 2040 for only paying a $1 a year to the respective landlord, no matter who it is. Apparently their is no way out the real estate agent tells me..
That is unless, someone does know??
Make an offer of A$ 20 dollars
i.e. 5% returni no, tell the old people you have a nicer house they can move into for $1 but the lease expires when they go into a retirement home or they die and if they agree then the house there in at the moment goes on the market at full price.
that way they might be gone by 2015 2020 but maybe thats already the deal with the house they have at the moment when they die the lease expires because you would not want them to hand it over to there kids or something and carry that lease on to 2040. other idea go to them and pay them $10k or something to move out. or pay 1 year in a retirement homeChris, it is not overly unusual to find a property which has a peppercorn rent on it. This is more commonly due to one of the previous owners having recieved a lump sum payment in return for the right to develop the site (for the leaseholder, it is essentially as good a title as freehold eg 99 year lease).
The price is reflective of the reversionary value of the lease. As discussed above, there may be some options such as buying out the tenant to relocate them to alternative accommodation (as pensioners, this may not be appealing). If you have a large portfolio you can always run this one as a loss maker.
Definitely not for the novice
keiko wrote:nd pay them $10k or something to move out. or pay 1 year in a retirement home
and after that one year, they will do what exactly……
duno maybe stay in the retirement home and pay the rest of the stay them selfs as i would be thinking the place there in at the moment will be run down. otherwise offer cash as they may be able to stay with family and go on a holiday on that cash, ya just dont no till u ask
duno maybe stay in the retirement home and pay the rest of the stay them selfs as i would be thinking the place there in at the moment will be run down. otherwise offer cash as they may be able to stay with family and go on a holiday on that cash, ya just dont no till u ask
If they put the court order in place you will never get them into a retirement home, they will fight you to the death (most likely theirs given their age). You need to figure out if the price is cheap enough, combined with the tax benefits of negative gearing of the property are enough to make it worth holding for the next 30 years. Also keep in mind that if you sell before then it will be very hard to find a buyer.
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