THE BOOGEYMAN IS OUT THERE!! … OR IS HE?
We’ve been sticking to a lots of facts lately, but today we’re sharing an observation, with a question.
In 2022, how often have we heard things like:
- It’s the government’s fault
- It’s the landlord’s or tenant’s fault
- It’s the contractor’s or builder’s fault
We have been noticing that real estate investors, and almost everyone else we know, are finding someone to blame for almost everything. And from where we sit, that boogeyman is quite the shape shifter!
But what if we put the “blame game” on pause, even for a few minutes. What if life simply changed and we don’t like those changes? Does that mean it’s time to quit?
One of our observations is that people are doing just that: trying to opt out or quit. Battle weary landlords have had enough – time for a new investing strategy. Tenant groups are jumping on whatever bandwagon might lower rents, or they’re living at home for as long as possible. Clients are haggling everyday with tradespeople – because inflation wasn’t their fault. And tradespeople are leaving the industry as profit margins are slim to non-existent. Overshadowing all of this, it seems like every citizen wants to blame some level of government.
But what if there is no boogeyman? What if no one is out to get you? What if we’re not victims of any conspiracy theory?
Let me be clear, I am not advocating denial or wishful thinking here. And we fully recognize that crummy things are happening to good people every day. But what if we take a broader perspective?
Today’s governments are dealing with higher inflation and higher housing demands than we have seen for 40 years. That means, some of our government leaders were literally babies or children the last time our country saw this level of mayhem. It also means that if we don’t like today’s government policies, we need to do something different with our next voting privilege.
In 2022, landlords are trying to break even with rising interest rates, along with all of their other expenses. And they often have a long line up of potential tenant clients. Rental housing providers in Canada are running small businesses, not charities. As the demand has increased, AND the business expenses have increased, smart landlords are running their business to the best of their ability.
Modern tenants are looking for value. This is no different than any of us with our shopping habits. Lettuce is expensive; okay, let’s buy kale. Meat is expensive, but not quite as bad if we buy in bulk; okay, let’s buy bulk and freeze or share with a neighbour. Wages simply are not keeping up with inflation, so tenants’ habits have to change. We’re all adapting to the new world that has been so unceremoniously thrust upon us.
Oh, and the contractor blame game. Contractors/builders simply don’t control the prices of wood, steel, electrical wire, or plumbing supplies. Diesel and fuel costs are affecting delivery prices in every industry – so no, it’s not unique to home building or renovating. Supply chain problems are not over: even Enmax is facing a shortage of transformers in Alberta! And some items, like countertops, have never been “returnable.” Renovations and contracting are just businesses, for profit. It is currently shocking to us that there are so many trade professionals looking to leave the industry. Pretty soon, who are we gonna call to fix and upgrade homes—I think the ghostbusters are busy?
There are a plethora of problems these days for the average real estate investor. It FEELS like a battleground. But imagine what the real soldiers out there are facing. They may blame the big bad dictator, but that doesn’t win a battle or solve a problem. What if as business owners and even as consumers, we take a page out of the book Extreme Ownership, by Jocko Willink and Leif Babin. We can choose to be successful warriors, work the problems, and find solutions. Will we get our first choices? Maybe not as we enter 2023. However, our financial and our families’ futures are too important to just blame the boogeyman and give up, or hide under the bed. We are not puppets; we have choices. Life is happening to all of us, but how we respond to each and every challenge will determine our future struggle or success.
