Tenant of a member of parliament

Hi all

What are people's thoughts on purchasing a property where the tenant is a member of parliament?

What are the pro's and con's of buying this type of property. What sort of yield for this will make you pull the trigger?

Thanks.

 

no different to any other tenant

 

Lol - I dont think it makes any difference. I imagine there's a lot of these in Canberra too.

What they do professionally is unlikely to matter, or be of any business/concern to the tenant.

I think I may have inspected Turnballs Kingston apartment once when he sold it just as he became PM (not sure), it was cool, but I don't think it meant any meaningful difference to anything (other than a lot of fine art!).

 

Commercial or resi?

Good strong commercial tenant but they will vacate if voted out (there's a break clause in the lease & also for other reasons), they will only occupy for 1-2 terms max and will then relocate.

 

It is a commercial property - should have been clear at the start.

Hmm seems like this type of tenant depends on the political scene very much. Isn't it kind of gambling too given the current political climate in Victoria?

What yield will you need after considering addtional risk of political instability?

 

I should've looked at where the post was launched - doh!

I'd be looking at it the same as any other retail site. The tenant will only be there for the time certain (ie the current lease), they may pay slightly better than some other tenant re: certainty of payment but as they outsourced tenant representative services (or at least in NSW), then you'd be dealing with their agents and not directly through the Dept of Premier & Cabinet, the deal done is probably also quite favourable to the tenant (if they had a good tenant rep negotiating the lease).

If they have been there for several years or more than one lease term, you can almost be sure that they will be relocating. Gladys recently moved her office from Naremburn to Northbridge, prior to that it was Joe Hockey's office

If the sitting member loses their seat, they will terminate when the new members are sworn in, if the member retains their seat then it will be status quo unless they will seek to move at the end of the term.

Third outcome is if the lease is for an aspriring pollie who leases on a short lease with an option to extend for their parliamentary term.

 

This is Australia, and in most cases, no one is above the law. It's what makes us so damn strong. You have nothing to worry about.

 

Why would the MP relocate if they have been there for a long time? Any benefit to the MP for not staying in the same area for a long time?

Makes sense if they lose their seat, then they will vacate. Am just wondering whether is there any way to mitigate this risk.

What's the minimum yield before you will consider this property and tenant? @Scott No Mates

 

The usage does not attract goodwill it is destinational, you don't just pop in to see your member , you may seek them out.

Move to a more marginal part of the electorate to become more visible, can't be seen as favouritism towards one owner, boundaries have been changed etc

Have all of your friends & contacts vote for them

Too many factors to consider - location, vacancy rate, alternative uses etc.

 

Thank you for the insights all

 

Not too sure. All I know it's on a tram line with quite a lot of foot traffic and ground floor. Tenant been in there for more than 10 years and have just renewed their lease

 

a) You won’t be able to trust anything they say.
b) If it’s a Vic state member then it’s likely they won’t remember anything agreed to and all the minutes will ‘somehow’ be lost.

 

The taxpayer will pay the rent so your on a winner, look at it as a upmarket dole bludger.

 

I hadn't heard of 'Officekeeper'

 

Some years back, was looking to lease an office. With an agent and we wanted to look inside one place that was totally vacant and advertised, yet still under lease with a local Fed Gov pollie. No access to the internals, by the agent, nor the owner. I think Fed Govt leases include a clause that bars access for any reason at any time. Not really a big issue.... but i found it interesting. Govt always pay, so i would see them as AAA+ tenants

 

There is a big difference between The government and a pollie. One is an institution that continues even when the pollie changes.

 

If they're an MP, then the lease is through the DPC or the federal equivalent, an aspirant via their party.