Developing at rear of IP

[MTR]

Hi All
I am currently looking at developing a unit at the rear of my IP.

Front property is tenanted, 1 year lease.

Is it possible to do this while the tenant continues to rent?? My initial thought was to offer a discount on rent, hell of an inconvenience to tenant. What about insurance etc. not sure about implications. Anyone been down this road??

Other option is just to wait and leave front vacant??

Like to know what others do.

Cheers, MTR

 

[Pa1nter]

One of my workers lives in Ipswich.
He was aware they were pegging the house / block out he is renting.
The REA told him it was being subdivided and that's all,several months later a removable house turned up on the land.
It is quite a large block that he had to maintain all the time he was renting.
He didn't even get a rent deduction as he lost half his yard.
He was pissed off however,he believed he might be kicked out if he complained.

 

[battler]

Anyone been down this road??

Yes we've done a few like this but usually do all the planning and permits before taking possession of the existing house at end of lease.

This enables us to stay in the house while we build, fence them separately at the finish then re lease to new tenants that don't know the difference.

This saves a lot of hassell with sitting tenants. Whilst you can reduce the rent because of the smaller block, they end up unhappy because of the disruption from the building works, and want to leave anyway.

 

[RumpledElf]

Same as battler, we're living in the house and putting up with the inconvenience ourselves.

Yesterday we were without electricity all day as a rewire got completed (almost 1 year after it was started, but never complain about the timing of a free rewire that took 3 days total to do) and Monday we have the septic tank being moved so we will be without sewer for at least 2 days. Wouldn't wish that on any tenant.

 

[MTR]

Not a great scenario for tenant, I thought a 40% weekly rent reduction until build has been completed may be attractive for tenant.

Cheers, MTR

 

[RumpledElf]

40% would be nice. I used to live in a corner block in what was a deceased estate they bought for $90k (this was 1998) and built the crappiest McCrap house on the back half of the corner. Builders constantly used our (outdoor) toilet, used our water so much there was no water pressure left for us, there was no fence, when they did put up a fence they moved it a few weeks later, our backyard was full of building materials and it was very noisy. No rent reduction. No nothing.

They sold the back house AND the front house 6 months later for $140k. Nice deal, considering it was rented for $135pw the whole time.

 

[AlmostBob]

I wouldnt while the tenant were in
the tenant leased the property in toto
If I were your tenant and you took away half my leasehold in the middle of the contract I would be extremely upset, and litigious,
40% would not make up for the loss of my quiet enjoyment of the rest of the leasehold property

 

[Kel]

MTR, agree with everyone, but why not give the tenant the choice? You never know what sort of financial situation that they are in, they might jump at the chance of reduced rent regardless of the inconvenience...