Landlord types are always an extension of their personality

Property Consolations: The ‘business model’ is about much more than profiteering

What if it was the case that actually none of this maintenance and investment improved profits? I’d like to think that isn’t the case, but ultimately I don’t think it would make any difference.

What if it was the case that actually none of this maintenance and investment improved profits? I’d like to think that isn’t the case, but ultimately I don’t think it would make any difference.

 

It’s a staple of newspaper business sections to discover entrepreneurs, tycoons and investors discussing their business model – their style of riding the capitalist beast – which we all might emulate.

The phrase “business model” suggests that someone has objectively analysed the best way to make money in a certain sector and vigorously applied those principles in a clinical fashion.

It may be that very large companies, teeming with analysts, apply these detached economically proven methods, though it’s noticeable that even the very largest companies – Google and Apple immediately spring to mind – still manage to retain the imprint of the personality of their founders, indeed carefully promoting that unique personality ahead of any business model.

But for the small-scale businessman or property investor, it is far more likely that personality will reign supreme over any objective business model.

If asked to elucidate my business model, I could tell you that I aim to supply high-quality accommodation to students and young professionals at reasonable cost. I aim to be constantly investing in my property stock – keeping on top of repairs and upgrading and improving. In turn I hope to attract the good-quality tenants who will look after the property.

Repairs and maintenance

That in a nutshell is my business model: I’m sure I spend a lot more on repairs and maintenance than my rivals in the sector. I do crazy things like pay for bi-weekly gardeners and insist that every lawn has quarterly feed treatments. Most houses get painted every year and shabby-looking furniture is ruthlessly replaced.

I vaguely hope that all this investment will mean few voids – I generally operate at 100 per cent occupancy all year round – and slightly higher rents, not to mention fewer complaints. But all this has an air of a posteriori rationalising because this is not the real reason that I operate this business model.

The real reason is that my personality demands that I operate this way. I’m the type of person who likes – to a slightly obsessive degree – to have things spick and span. If I arrive at a property and see a driveway covered in dirt and moss I will want it jet-cleaned immediately. I don’t like seeing litter or flaking paint or spots of condensation mould.

But what if it was the case that actually none of this maintenance and investment improved profits? There are certainly lots of the proverbial “rogue landlords” out there who, running to the other extreme, let the properties go to rack and ruin and yet build up massive portfolios. Perhaps I am just sweating the small stuff and they have their clear eyes on the bigger picture, the route to mega-millions?

More successful?

What if their business model is more successful than mine? I’d like to think that isn’t the case, but ultimately I don’t think it would make any difference. Because I think they have no more of a business model than I do.

A lazy landlord who does nothing to a property is unlikely to become scrupulous even if he thinks it will improve profits. And on my side, nothing is ever going to change the fact that I want my properties to look ship-shape.

In business, although we all operate within the parameters afforded by profit and loss, it’s impossible not to operate in a manner which projects your own personality, regardless of whether this actively leads to increased success or not.

The key point that most writers lose sight of when they discuss business is that such activity is not just about the pursuit of profit. It also profoundly connects to how you feel about the society and community you are living in and how your inner psychology demands that you order and manage the exterior world.

The next time you hear someone discussing their business model, consider whether you are just listening to a rationalisation of something that their inner personality makes inevitable.

Damian Flanagan is a property developer, writer and critic.

@DamianFlanagan

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