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How to survive and thrive from changes you didn't ask for

Tuesday, May 17, 2016

It is human nature to embrace stability.  We are programmed to find comfort in familiarity.  When we make plans, we assume that most things will remain constant.  When changes are thrusted upon us, our first reactions usually are of shock, dismay and resistance.  Ironically change is the one constant you can count on in life.  Nothing ever stays the same.  Everything, including you, will eventually change.  

Change is an appropriate subject for property investors right now.  As a group, we have had to deal with a great number of changes in the last 12 months.  It seems like anyone and everyone wants to tell us how we borrow money, how we deal with our tenants, how we create profits, who we are responsible for and how we should feel about ourselves as investors.  Don't unclench just yet.  It is not over, not by a long shot.  Minimum standards will soon become mandatory.  Labour's attempt to ramp up rental standards have just passed its first hearing at Parliament.  The Reserve Bank still has a bull-eye painted on investors.  And the market is at such a constant state of flux that it is heading to what many commentators are predicting to be a slow down of all slow downs.  It is safe to say that change is not only just likely, it is guaranteed.  

Change is good though.  Change underwrites evolution and betterment.  Change switches on our survival mode and pushes us out of our comfort zones to seek out new opportunities and growth.  So how do we embrace change, survive or even thrive from them? 

Let go of comfort 

We embrace familiarity because it makes us feel secure and comfortable.  What we often don't realise is that security and comfort often breed complacency.  Why should you push yourself to be better when you are already doing ok comfortably?  Have a go at doing this exercise.  Close your eyes, think of the word 'comfort' and make a mental note of the images you see.  Close your eyes again and think of the word 'complacent'.  What do you see?  For me, the fuzzy blanket and warm cups of tea (comfort) quickly turned to an overweight no-hoper languishing on the sofa getting nowhere in life (complacency, no thanks).  We get complacent when we get comfortable.  When we are comfortable we stop pushing ourselves, we stop learning, we stop hustling.  When we are comfortable we forget about being excellent and become ok with being just ok.  

So the next time change is forced upon you, take note of your initial feelings of discomfort: that tightening of your chest, the subtle twitch of your eyelid and the silent dread keeping you up at night.  They are good.  They are more than just stress signals.  These feelings are the precursors to your excellence.  They are reminders for you to push yourself through the situation and come out better.  Embrace the stress, harness your fear.  Don't let these feelings go to waste. 

Learn to spot opportunities 

Change has a tendency of shaking things up and creating new opportunities.  You just need to change your mindset to be able to spot them.  

Take minimum standard for example.  For the last 18 months or so, APIA members have been well aware that long life smoke alarms and insulation would eventually become compulsory at all rentals.   Where are the opportunities in this?   A couple of years ago some landlords started installing long life smoke alarms and making plans to upgrade insulation standards at their rentals.  Why didn't they wait until now?  On top of giving themselves more breathing space to comply, these landlords were also able to demonstrate that they were invested in their tenants' wellbeing.  The message they sent to their tenants at the time was incredibly powerful.  Essentially they were saying: I am putting these upgrades in because I want to not because I have to.  Why?  Because they could see that by preempting minimum standards, they had an opportunity to improve the quality and longevity of their tenancies the benefits of which surely outweighed the initial (and some would say, early) cost outlay.  

If at this point you are hitting your head doing a Homer Simpson D'ouh face and cursing yourself for not seeing this two years ago, don't.  Remember that uncomfortable feeling of missing the boat, calm yourself and start looking at other opportunities minimum standard presents itself.  Compulsory insulation now gives you an opportunity to audit the physical health of your property thoroughly.  Who knows, you may come across a cost effective way to improve your property's heat retention (and therefore value) which you had not considered before.  

Be better 

Vacancy is a dirty word is a landlord's book.  When a (good) tenant gives notice, do you curse inwardly and mourn a sense of loss or do you see it as an opportunity for you to get an even better tenant?  I truly hope that, by now, you would go for the latter.  Now that you are embracing discomfort and spotting opportunities left, right and centre, it is time to push. Not your luck but your self. How do you take advantage of an opportunity and end up in the better position than you had started?

There is no point getting excited about receiving a termination notice from a good tenant if you are not going to end up with an even better one.  Look critically at the out-going tenancy.  Give yourself (as the landlord) and your property a brutally honest review.  Find out why your tenant has given notice.  Is there something you could have done better to keep them there?  What can you change about yourself and your property to attract good quality tenants.  Also, review critically about how you vetting the out-going tenant in the first place.  What criteria did you apply, which references did you enquire into to help you grant the tenancy.  How can you improve your marketing and selection process this time to get more meritorious applicants?

Get gritty and roll with the punches 

As property investors, we are constantly faced with changes that are forced upon us.  Know this now.  When it comes to (forced) changes, you will not always come out on top but you must keep trying.  These days being a property investor is like having a bullseye painted on our collective back - everyone wants to have a pop at us to slow us down.  The government and the zeitgeist will continue to put pressure on our activities and it is up to you to roll with the punches and stick to your overall purpose.  You are going to have set-backs.  There will be days when you feel that everything is getting too much and caving in on you.  But you mustn't give up.  Property investment is a long term undertaking that is not designed for quitters.  The trick is to learn from the set-backs, dust yourself off quickly and keep going.  

Want to geek out more on grit?  Freakonomics recently did a radio show on How to get more grit in your life featuring the foremost authority on grit, or stick-to-it-ness, Angela Lee Duckworth.  Listen below: 

Changes are not as daunting as they seem at first glance.  More often than not, changes propel us to a better situation.  So the next time you find yourself having to deal with a forced change, don't hit the panic button!  Listen to that little voice in your head that is saying you have enjoyed your situation but it is time to move on to something better - push through and you will find remarkable things happening to you and your investments. 

How have you been coping with changes?  Share your journey with us below: 

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