Covid-19 Bounce Back loans for property businesses16:06 PM, 5th May 2020
About 3 weeks ago 46
As promised, following my last article, I wanted to give you some tips on how to avoid cannabis factories.
A cannabis factory is simply changing part or all of a home to grow cannabis plants. Plants are kept in potting tubs, set out in rows, requiring lots of artificial sunlight to grow. Given that one plant can provide around £2-300 of cannabis every 3 months, the earnings potential are massive. A small operation of 50 plants can generate returns of £40-60k per annum!
To provide for heat and lighting, the criminals will make improvised electrical systems creating lots of holes in plasterwork. Because so much heat is generated, they will also make improvised air ducts – basically knocking big holes in your ceiling. The electricity is not a problem, they simply bypass the mains, thus creating a fire hazard.
When fleeing from a site, they will take their kit with them leaving a ruined house behind. Their parting shot usually being taking the boiler, electric cables, radiators and piping to sell for scrap.
When you get one of these properties back, you’re looking at damage of anywhere between £10-20K.
However, prevention is very easy.
Cannabis growers want 2 things;
Prevention is always better than cure, so to avoid the problem on day 1, get proof of ID, address ID and visit the tenant in their existing home. Also get a home owning guarantor. With these simple steps, the criminals will move on to the next softer target.
If you have tenants, carry out an inspection and let them know in advance that you’ll be doing this. We carry out our first inspection after 5 weeks. That is far too soon for a crop to be cultivated so a grower will know that it’s not worth the hassle.
If you do inspect – watch out for blacked out windows. This is done to mask the evidence of heat lamps left on 24 hours a day.
Also be very wary of a tenant who offers to pay 6 months rent in advance by cash. This may seem like a dream applicant. They’re simply working on the basis that you’ll not visit them during this period allowing time for 2 crops to be grown.
And finally – make sure that your insurance cover includes malicious damage. Otherwise you’re likely to find that you will not be covered in the event of a claim.
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