Posted by ray@lcorn on December 13, 1999 at 23:32:08:
Sam,
I haven?t personally done a deal like this, but would offer the following as lessons others have learned in doing similar deals:
Check the local zoning laws for the property you are considering. Make sure the use is a conforming use.
Security is of course an issue, so fencing is a must in most places, as are all-weather driveways.
You need a very good insurance policy that is crafted to cover the specific operation. “Good” isn?t necessarily expensive? just thorough.
I would want a very well written rental agreement, and would not use the lowest cost attorney to draft it. In fact, I would seek out the most likely attorney to take on a case like this if something were to go wrong, and use him to draft an agreement he would have a hard time suing under!
I recently parked my conversion van at an outdoor storage facility. Unlike most facilities, this was not garage-storage. It was just open land with a fence around it. Of course, recognizing the cashflow potential of this place I began asking questions to the manager. He informed me that the place was a cash cow (little overhead, no tenants, lots of cash). Does anyone own or been involved in this type of business? I need to get some more information. It seems to good to be true.
Thanks
Open land can be a very lucrative venture! - Posted by SusanL.–FL
Posted by SusanL.–FL on December 14, 1999 at 10:33:05:
Hi Sam!
When we had our commercial property, there was a substantial portion of an acre sitting behind our building not being used. Kenny fenced it in himself and then we rented it out to someone who wanted to store cars (a friend of Kenny?s Father). We charged a monthly fee to this individual. (His half sister, who also has open storage, charges by the vehicle?be it RV, boat, car. Definitely, more lucrative!)
Things were clipping along pretty good (with our open storage) until one fine day, the renter decided he didn?t want to continue paying his storage rent. Well, the renter thought he had us over a barrel. Wrong! We read them BOTH the ?riot act? (since Kenny?s Dad was pretty much in kahoots with our tenant). [It is really ?funny? when they think they can change the rules because they are ?family?. They ?forget? that you still have to pay the mortgage on the place whether the rent comes in or not!]
I let them BOTH know (in writing) that they had X number of days to either pay up or clear out and that I would have the cars towed from the property at their expense.
WELL! When ?Pops? heard that, he told my husband that he?d be waiting there (for HIM!) with a 357 Magnum! So much for blood being thicker than water?.
(We rode by and there he WAS sitting in his car!)
The tenant thought I was bluffing?so I called our local tow truck company and they ?impounded? all the vehicles until the tenant paid up.
P.S. We have little to do with the Father at this
point?.
The people we eventually sold the property to have a used car dealership and were also able to use the fenced-in area.