Drug house tenants

Has anyone had this happen to them?

http://www.abc.net.au/news/2015-08-...rug-dealing-tenants-trash-investment-property

 

No

 

Norlane - how could you rent a house to someone in Norlane and not expect them to turn it into Walter White's Wonderland.

 

Yes, actually. We just kicked out 2 druggy squatters from one of our properties - we had cornice ripped out and pipes poking through the ceiling as well. Power had been rewired too. Thankfully a concrete slab may have deterred them from cutting holes in the floor.

So now we're doing a surprise reno....

 

What's a surprise reno? Tenant proofing?

 

Surprise! Your house is crapper than you thought!

It's looking really tired so we decided to spend a bit more than originally planned to make it more appealing to prospective tenants.

 

I would be interested to know what the insurance complications are. Lack of landlord insurance maybe?

The sad truth is that from an insurance claimability perspective, you are better off renting your property to a destructive junkie than a person that is super unclean from a housekeeping perspective. Because the former is generally considered to be malicious damage and the later is "fair wear and tear".

I notice from the pics the house is on stumps which would allow direct access to the soil beneath the house which is handy to those keen on growing crops.

I've deliberately bought property that was curiously rewired by previous owners with speaker wire which was nailed to the doorframes. Yup. Nice. I've seen coat cupboards with curiously thick extension leads coming from goodness knows where from punched holes in the plaster. Such cupboards tend to have substantial lighting and safes big enough to house cash, documents, drugs and handguns. I've seen streetlights bolted to the front of houses, brightly coloured solid steel front doors, and questionable adornments on the front porch. Generally equating to a message of "yes you are at the drug dealer's house, please knock". No prizes for guessing what such properties were previously used for. I don't mind - I am aware of the cost of rectifying such things and this is reflected in my offer.

 

Apparently they changed insurance policies mid tenancy and were knocked back due to it being "prior damage".

 

I expect they had building only and then at the first sign of trouble added on landlord insurance, but as the damage was done prior to taking out the LL policy, no cover.

 

The comments on the Facebook article are pretty disappointing. One of the best was "That's what you get for investing in property, that's why I'm a renter for life". People like that are the reason I don't worry about my properties ever been vacant for long.

 

Not quite, but had a tenant install a large metal shed that just fit under the pergola right next to a downstairs bedroom. Had the shutters and all curtains in the house closed on sunny days we went to do maintenance, poked his head around curtain on sliding door. Had a barky dog and security cameras. Delayed when PM wanted access. Suspect he set up a grow room (or worse) downstairs and moved it into the metal shed thing when there were inspections.
Glad to see the back of those types.

 

I've had grubby disgusting tenants, but no drugs. Well....not yet, anyway.

 

Just spoke to a lady renting today! She said the previous tenants had done a runner, hadn't paid rent for some time. Took the blinds and light fittings with them. They found a bag of marijuana under the stove and in the garage and a few other weird things (can't remember name) not as bad as that story though

 

Not that you know of. They're very sneaky.

 

Median house price being $216k for the suburb and yield being 5.7% according to RE.com

http://www.realestate.com.au/invest/house-in-norlane,+vic+3214

Reason why I prefer to buy a more quality products rather than heaps of cheapies.

Yes you can have the same thing happen at 500k but the chances are if they are paying 400+pw in rent they should a decent tenant or is the drug dealer not farmer.

 

I wonder if they get the same tax benefits as other primary producers.

 

Their tax benefit is everything is tax free.

Not sure if they report to the ATO about their drug profits...

 

No tax deductions, but perhaps easier access to firearms?

I've never had any problems of this nature myself, but my parents have had a couple of tenants growing weed. Nothing on this scale though.

There's a couple of things worth noting:
* The property is in a low socio-economic area with known drug problems.
* They were self managing.

It looks to me that they're focusing on cheap cash flow properties and cutting corners. I'm also willing to bet their insurance complications are because they only have building insurance and not landlords.

 

The last time I went to Geelong I was really shocked with how gaunt and abandoned the city centre looks - it's terrible. No amount of moving state government headquarters there will turn that situation around.

 

I wouldn't call the city center of Geelong low socio-economic. I agree that it's not as nice as some of the mega shopping centers you see in some large cities, but if you look at some of the residential areas immediately adjacent to the 'CBD' there's a lot of very desirable places to live. I wouldn't say it's any worse than most other non capital cities I've visited recently. The bay and peninsula, combined with proximity to Melbourne and the smaller town feel make it quite desirable for many people.

Take a walk along the foreshore on a sunny weekend. You're still in the city but there's a very nice vibe going on there.