Investor stories: My house was turned into a hydroponic drug farm

After Property Observer published a list of ways to check whether or not your tenant is turning your property into a drug den, some industry members and property owners wrote in.

Smart Property Adviser’s Kevin Lee was among these readers, describing clients of his who had been taken for a ride after accidentally leasing their Adelaide investment property to drug dealers.

They had felt let down by property managers in the past, and took it upon themselves to self-manage – finding a couple with great references.

Lee explains that it was “happy days” for the investors at first, the tenant paying their deposit and bond completely in cash. In fact, he said, they appeared to be “such perfect tenants” that the investors were tempted not to renew their landlord’s insurance policy.

The tenants paid their rent on time and in cash. They also installed a new, powered, remote-controlled double car garage roller door at their own expense of $2,200, after the investors’ approval.

“The owners occasionally drove past the property, and it always appeared 'lived in', and when they conducted a routine inspection in early November 2013 nothing seemed suspicious,” explains Lee.

Fast forward six weeks, and the Adelaide police raided the properties, arrested the tenants, and revealed that the property was a hydroponic drug farm. The tenants had used false names, identification, referees and references, and resulted in more than 100 man hours worth of effort from the investors to resolve the problem, deal with police and the insurance company.

Despite this, they remain $2,000 out of pocket, Lee explains. Their landlord’s insurance policy covered them for $12,000 in costs to clean and re-wire the property and compensate for loss of rent.

Kevin Lee recommends the following:

• Always ask for driver’s licenses, passports and bank statements to prove income and employment.
  
  
• Do not accept cash payments – ask for payments via internet banking, such as BPAY or DEFT.
  
  
• Have landlord’s insurance.
  
  
• Keep a professional relationship with your tenants.
  
  
• Consider digging around for a better property manager.