Indianapolis buzzes excitedly during the month of May with the Indy 500. If you’ve never attended, it is a highly recommended ‘bucket list’ item. Over 300,000 spectators watch 33 drivers strap themselves into horizontal rocket ships zipping at 230 mph around a 2.5 mile oval. It is simply a spectacle to watch.
Before the weekend activities commence, I thought it would be enjoyable to compare how the best racing teams win this pinnacle event with how the best investors, landlords, and property managers win their own pinnacle event–their Financial Freedom.
As with every kind of sport, there are rules, regulations, laws, and customs that must be obeyed. Some of the rules are for playing fair with each other, some are there to provide a base level of safety, and some are there to provide an element of controlled risk/enjoyment for the players. Just like in the race, there are rules and regulations that landlords and investors and property managers have to understand inside and out. Failure to know these operational guidelines will incur expensive penalties that put you in the back of the pack, so to speak.
The old timers at the track say races are won and lost in the pits. A pit crew is like a well organized ballet dance group–each person knows his precise moves necessary to keep time down to a fraction of a second in order to gas up the car, change tires, make adjustments–all in literally a few seconds. They also know instinctively what to do when a tire gun jams or something breaks unexpectedly. They have trained relentlessly and with vigor. Likewise, they have lined up the best of the best vendors for parts and knowledge. Again–having a solid team of both crew and suppliers is paramount to that marginal moment that defines a victory or a loss. In rentals, the same is true. If your staff and suppliers are unclear of their roles in every conceivable situation, when the pressure is on to perform, you’ll fail. If your materials are not up to snuff, you’ll fail.
Fans and spectators alike await the inevitable crash and wreck, sometimes with cars flying literally through the air. When you combine high speeds with a narrow racetrack and human beings at the controls, it will happen. The difference in avoiding tragedy for the race teams is they have anticipated the impacts of such events. The cars are engineered to minimize the human damage to the drivers with energy absorbing materials and design. The track safety teams are experts at extracting a driver from the mangled mess of machinery. And the clean up crews are highly trained to remove all the debris and make a safe racing environment again quickly. In the rental world, you will have wrecks, too, due to the human factor. Smart landlords, investors, and property managers have detailed plans for all kinds of contingency situations–breaches of lease, insurance issues like busted pipes, and other catastrophes. The more you plan for these to occur, the smarter and less emotionally distraught you can be when they actually DO occur. In addition, the more resources like attorneys and specialty vendors you make relationships with ahead of time will be to your benefit, both financially and emotionally. It keeps a wreck from permanently putting you out of the race for your Financial Freedom.
Every single pit area at the race track has tires stacked neatly with chalk numbers on the tires. This allows the pit crew to grab the correct number in sequence based upon how far into the race they are, the race track surface conditions, and their strategy for finishing the race strong. Savvy investors and property managers and landlords likewise have systems for their rental properties and operations. They have protocols in place for how to accept rent payments, how to log service issue requests, how to pay invoices, and how to interact down to even the basic things like email signature disclaimers (i.e. Mini-Miranda warnings for compliance with FDCPA guidelines). All these kinds of systems are for one purpose: They eliminate randomness and the injection of unknown results. Unknown results are EXPENSIVE. They negatively impact your goal of Financial Freedom. Thus, be like a world class race team and systemitize everything you can possible.
Every action, every effort, every thought goes into how to get the driver’s face added to the famous Borg-Warner Trophy each Indy 500 race. But what shouldn’t be a shocker to you by now is this truth: The Race goes not to the fastest or who leads most laps at first….it is most frequently won by the team who best understands the Rules of the Race, the team with the best pit crew and supplier base, the team with the best plans for unexpected emergencies and wrecks on the track, and finally, the team with the best systems. In other words, the BEST team. It’s the same with rentals. It’s your ability to become the BEST–to have the persistence, the ability to get bumped and not crash, your ability to stay focused on your long term goals, and the ability to keep reinventing your systems and technology to stay the Best.
Have a wonderful Race Weekend!