I’ve tried to make a list of everything that can go wrong being a landlord – the list ends up being too extensive and exhausting to consider. However, I always realize that I did not think of everything – I know I never will. If you’ve been a landlord long enough you know that when you think you’ve got The Public figured out they will always surprise you. I also don’t have the head space to run around with a list of a thousand different things I need to constantly check to make sure things are running properly, plus I’d never feel confident that I’ve checked everything. I wasn’t sure what to do about this and then I discovered a strategy:
Mental Models.
In the book, Smarter Faster Better: The Secrets of Productivity in Life and Business by Charles Duhigg, he talks about Mental Models and how people use them to succeed.
Mental models are strong pictures or stories you tell yourself that let you process information quickly and accurately to allow you to isolate the most important factors you need to consider.
Duhigg told one story about Darlene, a nurse in a neonatal intensive care unit (NICU). She was the one nurse in the department that seemed to detect issues that other nurses tended to miss. One baby in the NICU was being watched by a different nurse. This baby’s vital signs were all normal, however Darlene noticed that the baby’s colour was not uniformly pink, her belly seemed a bit distended, and that the site where they had just drawn blood still had a drop of blood on it – an indication that it was not clotting properly. Darlene called the doctor, who opened the incubator and started this baby on an IV antibiotic immediately. Her observations led to a quick intervention that saved the baby’s life. The baby was in early stages of sepsis, and any delay in the IV drugs would have been too late.
This nurse explained that she carried around a picture of what a healthy baby looks like – which included uniform skin, and blood that clots quickly. Instead of trying to remember a list of things that could be wrong with the baby, this nurse referred to her robust mental model of a healthy baby. While the monitors said this baby was healthy, Darlene noticed three data points that said to her this baby isn’t healthy. Darlene focused on these three points and was able to save that baby’s life.
How do you use mental models as a landlord?
I use mental models in two main ways:
1) Dealing with tenants
I have a picture of all the stages on the ‘Tenant Suitability Scale.’ I use these models to assess prospective tenants, and also to determine if a tenant is moving up or down the scale, if a tenant starts sliding down I need to be prepared for a problem. For example, if I rent to an average tenant, I have a picture of what an average tenant is, and I’m always watching and confirming they still meet this picture. For example:
My mental model of an average tenant’s apartment is:
- • Messy and possibly dirty
- • Has basic furniture – maybe a large TV
- • Not much on the walls
If I go into the apartment of someone I expect to be an average tenant and notice they no longer have a couch, or if their apartment is filthy, there may be a problem. They could be inching toward becoming a below-average tenant, which will then lead to problems. Or I could go in expecting to see a dirty apartment and be surprised to see it is sparkling clean – maybe they are moving up the scale.
Another of my mental models of an average tenant is someone who:
- Works full-time (or is retired and has another regular source of income)
- Is responsive to calls, texts or emails
- Is pleasant and will smile and wave
- Has one or two cars
I always am confirming this model when I talk with or observe a tenant. If I pass by their apartment three days in a row and they are home during the day, or if I call and they don’t get back to me for a few days, I want to investigate that. If I consistently see three cars in the yard I question what is going on.
2) Managing properties
I have a distinct mental model of what our properties, both interior and exterior, should be like. Any time I go into an apartment or a building I do the following:
- Smell –Our apartments should not have any strong smells
- Listen – Our apartments should be quiet. Rattles, drips, knocks, bangs are cause for concern.
- Look – Our apartments should be uniform. The baseboards should be one colour, the walls a standard colour, ceilings all one color.
- Feel – Our apartments should be comfortable – not hot, not cold, not damp, not dry.
I complete these informal inspections every time I go into an apartment or unit. I don’t have the mental space to carry a list of a hundred things to check every time I go in, (that’s why we do annual inspections), but I can use my mental models
I am always using my mental models to try to root out any minor issues before they become big and crippling. How about you? What mental models have you used as a landlord?