The title of today’s post is derived from the famous scene in the movie, The Godfather
It takes place when Michael Corleone rebukes his brother about an impending action the family is about to take to avenge the shooting of their father, “It’s not personal, it’s just business.”
If it’s been awhile since you’ve enjoyed the movie, here’s a link to the clip…The Godfather
If you’ve been a landlord for more than one week, you know human beings, at times, can be messy.
Messy in their housekeeping.
Messy in their organizational ability to pay the rent on time and plan their household expenditures.
And finally, messy emotionally as they juggle the demands placed on them by work, family, finances, and societal expectations.
That is part of the human condition. It’s best to accept these shortcomings and embrace them for tremendous success in your rental properties. Or don’t accept these shortcomings and get out of the real estate game as you will be continuously miserable because your expectations for their behavior to change will never be congruent with reality.
I bring this movie quote up because it is heard frequently from exasperated landlords attempting to explain, cajole, and threaten to their non-compliant tenants into compliant action. Feelings get hurt from the words exchanged by both sides sometimes. Threats get made, again by both sides. And usually, once the landlord has reached the end of his or her rope with the dialogue, they invariably end it with this famous movie quote….”I’m not making this personal, it’s just business.”
And, unfortunately, in my opinion, they are dead flat wrong.
Operating profitable rental properties and making smart business decisions “isn’t just business.” In fact, it is extremely personal.
These business decisions go directly to the heart of the matter of “Why” you invested in rental properties to begin with…
Each time I counsel and coach a frustrated landlord about their operations, we always end up refocusing on this 3-letter word. The answers vary widely, of course, but they all boil down to this simple concept on why they have rental properties: Financial Freedom.
Now, Financial Freedom can and does mean different things to different people:
- For a near-retirement professional, it can mean diversifying out of the stock market as a protective maneuver so they can sleep peacefully at night.
- For a middle aged Mom or Dad, it can mean it’s an additional income-producing asset to help help fund their kid’s college expenses in the too-close future.
- For a REALTOR, it can mean another revenue stream for when the housing market makes a correction and Closings checks are too far apart for their stomach acid to handle.
- For a member of the “sandwich generation”, it can mean having the extra monthly cash flow to help pay for their aging parents’ medical expenses, knowing they won’t bankrupt their own dreams of retirement doing it.
In fact, I’ve never met a landlord who was in it solely for the money and profit as every one of them has plans for that profit in their lives. It funds something they want or believe in deeply.
Which leads is back to the movie quote again about it “being business and not personal”:
…when a tenant doesn’t pay their rent, their actions hurt your personal dreams or personal obligations to your family.
…when a tenant trashes your rental property, they force you to spend money repairing the home instead of continuing to earn you more profit to fund your personal goals.
…when a tenant breaks their legal promises, they inflict on you personal emotional stress and strain to protect your asset, to protect your cash flows, and to protect your personal reputation as a professional.
Smart landlords understand that, in the end, it is all personal because it all begins with your personal dreams.