For the last three years I’ve worked with elementary aged kids in the world of behavior and social emotional health. In a school of about 400 students from grades K-4, our team has done our best to create a sense of community around the shared values of respect, responsibility, and safety. Despite exceeding Dunbar’s number by over twofold and weathering the most heavily interrupted years in the history of public education, by most metrics, this approach has been successful as a basis in creating unifying core beliefs that led to common anchor language.
In reality, what we’re trying to do as educators is the same thing successful real estate investors should be doing: establishing and leaning on first principles. If “playing the long game” is at the core of your investing strategy (and it should be) then “safety” (being safe and feeling safe) is similarly at the core of what we focused on with students as we returned to school during a pandemic. All redirection of behavior is weighed against those big three core values (was that a respectful choice? A responsible choice? How did your choice impact the safety of others?)
So what do you weigh your investment choices against? If you haven’t explicitly defined what your first principles are, answering that question will help you get there.
THINKING ABOUT IMPACT
Guiding principles yield guiding essential questions and there’s no better place to start than to ask yourself about the expected impact of the decision at hand. To return to the school example one last time, “Did that choice have a positive or negative impact on your classmates”? To simplify for the 5 year olds in the building we’d say…did your action make people happy or sad?
How is this any different than the essential questions a property owner should be asking themselves? Sure you’re talking money and adults, not kids’ behavior, and your primary objective may be to maximize profit, but creating unnecessary negative outcomes for your tenants is not the best play. Pissing people off for your own benefit rarely plays well. You need to find that sweet spot. You need to make other people feel valued and happy so you can continue to reach the goals you want (assuming they’re realistic).
The idea that “the customer is always right” is nonsense…but the idea that you want the customer happy as often as possible is critical to financial longterm success. Happy customers come back time and time again. Happy customers tell their friends about your superior service or product. In a world of pocket computers and social media, the impact you have on others is going to be shared far beyond that one individual…so make it a positive one.
MAKING PEOPLE HAPPY IS GOOD FOR YOU
You own properties. Tenants live in those properties. You are investing in those tenants’ happiness. And if you do it right, there is no tradeoff. Their happiness is your happiness.
Per Nexus Property Management VP of Franchise Sales, Greg Rice, there are 4 types of Real Estate Investors: the Micromanager, the Active Participant, the Passive Observer, and the Slumlord. If you’re here reading this you’re most likely a Micromanager (don’t be) or an Active Participant (do be). That means you’re putting the time and value into your property to add value to your tenants’ lives and quite likely you’re simultaneously adding value to your building(s) as well.
That win-win scenario is ideal. But even if you weren’t turning a profit, pro-social behavioral studies show us that wanting to do nice things for others is a cultural universal. We’ve evolved to take care of others. There is no more nurturing species than our own and while we’re certainly not “raising” our tenants, researchers have shown that caring for one another positively affects our own health.
We all need to work to find that balance that creates a win for us and a win for them. Find that place; that amount of rent and that investment in the quality of your rental units, that keeps tenants happy, which means they’re paying regularly, they’re sticking around, and they’re taking care of your place. Sure the game is investing and the money is real, but not all gains will appear on the bottom line.
Notes:
https://neurosciencenews.com/dunbars-number-social-brain-19210/
4 Types of Real Estate Investors; Which One Are You?
https://pubmed.ncbi.nlm.nih.gov/18321629/
Photo Credit:
https://rboa.com/are-you-winning-the-digital-attention-game-or-are-you-sitting-on-the-sidelines-whining-about-the-rules/