Taking care of little things to reduce disorder has been the guiding principle for Disneyland, Bryant Park, Times Square, and countless luxury hotels.
You can springboard off this by understanding that your rental’s cash flow and equity are influenced by how well you eliminate disorder.
What is Disorder?
Disorder is a catchall term for litter, graffiti, drug-dealing, not enforcing house rules, overgrown yards, dilapidated homes, etc. It makes people feel uncomfortable.
Disorder poisons the atmosphere for prosperity and repels honorable tenants.
Addressing small, extremely affordable things prevents larger problems from occurring AND it tips troubled neighborhoods towards revitalization.
As I did in Part 1 of this series, I’ll use a teeter totter to illustrate my point. As the above figure implies, increased disorder leads to decreased property values. This is the landlord’s version of the Broken Window Theory.
When we connect it to the Leading Landlord Principle (discussed in Part 1), the mechanics look like this:
Now you can see the interconnection. Increased disorder lowers property values and results in more influence for landlords.
Let me say that in reverse: rental property owners in troubled neighborhoods have the ability (influence) to eliminate disorder that negatively affects their property values.
Now that your eyes are opened to this phenomenon, you’re probably wondering what should you do. Well the next step is to deploy all your built up influence to increase your property values – right?
An Alternative Investment Strategy for Inner City Landlords
The act of counterbalancing takes the form of exercising some leadership. You want to make sure activities that have proven to be effective in other neighborhoods take place in yours.
This is an alternative investment strategy. It goes beyond just collecting rent but it is a predictable and lucrative way to create wealth.
It’s also an honorable way to do business in an underserved community.
In the next article, I’ll suggest six extremely affordable things you, as a rental owner, can do to push back against disorder.