Spate of tenant lockouts

[fernfurn]

Partner has had to get solicitors involved and lock out his tenant for unpaid rent. Has been a shocking payer, and warned and warned this will happen. Anyway locks went on all doors Monday am. Receptionist and other staff member would be most surprised when showing up for work I would imagine. Anyway, he has desks, computers, tons of stock etc. and we are wondering what the next step is. Can he take out some order somewhere to just get his stock and say we are suppressing him carrying out his business? REA said he hasnt had one of these in 10 years but has had 8 last week

 

[Rolf Latham]

Just a sign that the economy is a lot more broken than we think ?

ta
rolf

 

[Aaron Sice]

that and the fact that if you can't afford to rent, it's time to find a tenant who can, play swapsies and accept you have to downsize.

 

[fernfurn]

This is still ongoing, the tenant rang the agent and said he wanted to pay, agent said he wouldhave to talk to solicitor. Didnt. Came back to agent and said he wanted to pay and could he have his credit card facilities out of the property to eftpos. Agent wisely said no. I think this was a cunning ploy to get the eftpos machine out as he wouldnt be able to operate his business without it. Evidently one of his staff had been working from home, but I dont know whether she could access company records without the computers turned on in the shop. Then the agent said he would have to pay for the solicitor and changing the locks as well as outstanding rent too and he cracked it and walked out. ???

 

[Ausprop]

what sort of business and size of premises is it? do youhold directors garuantees?

 

[fernfurn]

A little shop in a suburban centre. It would make a good coffee shop as there has been a huge amount of development around it and a school nearby. This guy has been as cheeky as. When the long term tenant was shifting out, he just shifted in from next door then told the agent he would rent it. Took the agent forever to get a signed lease out of him (slack in my opinion) but thats my partners worry, I wouldnt have stood for it. So thats a no to directors guarrantees. My partner originally bought it to put an apartment on top (then he met me) in the meantime everyone else in the strip has done the same. He is now thinking of selling it and although I hear Dazzling saying we ought to have a tenant first, the agent said it could be good without one as the new person might want it for themselves. Originally had a long term accountant in it.

 

[Cashflow]

If looking to sell - I'd recommend finding a tenant first - this way you will be able to sell it for more as there will be immediate cash flow to the new owner as well as a lease in place.

Is there any way you could take this opportunity to freshen the property up and also add on top? A problem is only a problem if you let it be one!

I'd start immediately looking for a tenant - if it takes a while to find one then offer incentives - less rent for an initial period, repaint that would suit them - find out what the prospective tenants want and meet their need.

Why not carry out letter box drops to surrounding businesses - they may want to downsize, upsize or want a newer premises. Also put the word out through your personal contacts including solicitor, accountant etc.

If you cant afford the floor addition perhaps you could look at partnering with someone. Look at the situation like a jigsaw - get multiple situations and piece them into a picture that will work for you.

Good luck and please keep us posted.

Peter
www.cashflowcalculators.com.au
www.privaterealestate.net.au

 

[kum yin lau]

Hi, I've the same problems. But 1st, my sister owned the single shop next to mine & her tenant who sold to my sister on a leaseback, decided not to renew the next lot of 6 years. He dragged his feet on the rent for the last 5 months. My sister put it on the market before the end of his lease. It finally sold for quite a good price. For my sister, it was a good investment. It was sold @ 7% yield. Untenanted, to an owner occupier.

So, you can do both. Have the property For Lease/For Sale at the same time. I'd think a lot of people are looking for small shops. At least, that's what's happening to us. My tenants are asking to buy the premises but at 7% yield, it doen't make sense for me to sell.

I had one shop leased to a printer, 2 shops actually on VERY low rents. And he had the nerve to owe 5 months rent. Finally I got so fed up I kicked him out. One shop rented immediately. The other one was vacant for close to 2 years, one of the main reasons being that everyone wanted to run a cafe & the council put in a lot of obstructions.

Another tenant moved out in June. So last month I was busy painting & repairing & because I was there, quite a few people enquired & we now have both shops rented.

One rented to the existing tenant who has expanded. The other tenant moved to larger premises.

So the signals are a bit mixed. Some small businesses are fluorishing and some languished.

With the bad tenant leaving, the total rent of that block of 3 has gone up about 40%

So if your shop is in a not bad location, you'll do well if you sell or if you hold.

My 'advice'? Clean up the premises, even if it's only sweeping away the dust. All I did was that + a bit of repair & straightaway, people were interested.

Good luck,
KY

 

[pennyk]

I was recently speaking to the manager of a very large shopping centre. He said that retails sales were significantly lower than last year, and had completely tanked in the past few weeks.
But he said that the one group of tenants who had increased turnover was high end jewellers. Their sales were continuing to grow strongly.
So, perhaps look for a jeweller!

Pen

 

[fernfurn]

The tenant finally had to give in and pay all outstandings and then he got kicked out. Property is on the market for Lease and Auction. It will be interesting to see what he gets for it.