Slumlord: Someone who wants top returns with little or no investment and always knows better.
Have you ever had an owner who is just not worth the hassle? They reduce your staff to tears, complain all the time and, no matter what, they just never seem satisfied.
I believe it’s because property investing is a business and, put simply, not everyone is good at business. If you have owners who believe their financial independence will be achieved by little or no investment in the property, have no care or concern for their tenant and want everything for nothing (or next to nothing) from the agency, you need to let these people go. They are a waste of your time.
It’s easier said than done, but I’ve let a client go who had 11 properties. I also let one go who had nine properties. In fact, even if a client only had one property letting them go still affects cash flow, but I believe your mental health and the reduced stress is worth more than their money.
You need to remove these people from your books and your business. They possess what is known as a “scarcity mentality”. They want everything for nothing. And they believe they can only get ahead by trampling over everyone else. A win for them might well be a loss for you. If your best isn’t good enough for them – let them go. Your staff will be happier, your agency will have less risk and your stress will reduce.
And just like pruning a plant – the growth is quickly restored and the weeds will be removed.
People with a “scarcity mentality” can be identified by the following traits:
- They want to talk price straight away
- They want to service their own smoke alarms
- They want to do all maintenance on their properties
- The insist on discounting
- They are high-touch, low-paying customers
- They invest very little in relationships with the principal, the property manager and their tenants
- They will leave if they find a cheaper agent
- They don’t take advice well and always believe they know better
- They are more of a risk from a compliance and litigation perspective
If you run a business that’s on its way to being successful – then you simply will not get there by carrying a lot of unsuccessful and unethical owners in your portfolio.
Sometimes in life it’s what we say no to that makes us prosper.