Death, Dislocation and Disgust

While walking to the next tee, my golf partner and I were speculating. Would the economic retrenchment here in "Upper Hedgistan" lead to an increase in supply, and therefore lower margins, for folks in the "furnishings on consignments" line of business?

Lisa said, "Economy is irrelevant. There are only three things that matter to a dealer: Death, Dislocation and Disgust." We got a good laugh at the time, and I've been reflecting on the statement all week, because those are my business drivers as well.

Death
On Wednesday, a colleague of mine with a wealth management firm in Chicago told me about two surviving young adult sons of a youngish father who had died prematurely. The boys felt overwhelmed by the quantity of belongings and homes that were left to them. After a time, their wealth manager thought to hire a local lifestyle service, who went through the homes and created an initial sort into 3 categories- -personal memory, valuable asset, and tag sale. The service removed everything -- every single thing - -from three houses and consolidated it into a warehouse, by those 3 categories. The family then "shopped" the personal memory section, and signed off on the disposal of the remainder with maximized time savings and minimized emotional strain.

Dislocation
Emotions surface in any move where one person experiences the move in a negative frame of reference, usually due to a lien-holder, a medical condition, or a soon-to-be former spouse. Divorce and Senior Transitions are two very common client situations where we experience the frustration of unwillingly leaving one space for another. The most successful dislocation experiences - -by which I mean least negativity and quickest rebound - -that I see are those where the person rents a fully furnished alternative style for six months to a year. Even where one stays in the same town, the affirmative decision to forego furnishings of the prior life is, for reasons beyond my expertise but not beyond my observation, immediately stabilizing. Tangentially, my favorite divorce word comes from Sandra Manzke at Maxam Capital, who calls her ex "the wuzband."

Disgust
This is the punchline of Lisa's remark, and it is like most jokes funny in proportion to its truth. To skim only the surface of a long list of personal annoyances - -crowded closets, limited bathroom space or snoring -- leads to upsizing. Creaky joints and aging pets lead to one-sizing (moving from a home with stairs to one without). Empty nesters react to years of putting the kids first by me-sizing into properties that are more selfish in location, design and use of space. A strong aversion to living "the next part of my life" constricted by the rules of the past is what the Disgust move is really all about. When we are providing location research for our clients, we approach it exactly like a financial stock screen. The fundamental screen for us? Screen 1 is tangible aversion factors - -what you will no longer accept.

In my business, clients are fighting a two-front war. The first is the tactical demands of lifestyles and households ; the second is surviving the emotional vortex that fate has thrust upon them. Good soldiers on the ground separate the victorious from the fallen.

Provisioning a Buy to Let Property

Last weekend's Wall Street Journal article about how to attract Canadian buyers was interesting reading, especially the part about "throw in the furnishings". Of course the odds are not good that those furnishings are quality, appropriate and in good repair. The real point of the journalist was that time-to-market is a priority consideration for buy-to-let investors.

Here at The Home Zone Company we provision high end winter or summer rental properties for absentee or investment group owners. By "high end" we mean those rentals that the owner intends to maintain in the top 20% of the weekly or monthly rental rates and run at no less than 90% occupancy during peak season for the area. By provision, we mean stock it and stage it from front door to back gate so that it is an attractive rental.

Our client's investment properties are not about fabulosity and vision -- they are about broad, generic appeal to an upper middle income family who want to live comfortably and stylishly while on holiday.

A good overview of the minimum furnishings required can be referenced at the Home Away website. For a more detailed look at what is working for our clients, here's the formula. Basically, you leverage the mindshare gained by furniture retailers that have done the marketing for you all year long...training the eye of the typical high end vacation property renter:

1. Living and Dining areas for Mountain or Country Properties = Restoration Hardware and warm color tones on walls and fabrics.
2. Living and Dining areas for Beach or Summer Only Properties = Williams and Sonoma and cool color tones on walls and fabrics.
3. Living and Dining areas for City Apartments = Design within Reach, Crate & Barrel using gold tones throughout.
4. Overstock.com for towels, bedding & kitchen appliances.
5. We use Wesley Allen for headboards because they are affordable, durable, easily cleaned, charming, custom colored and ship quickly.

What you don't want to do is recreate the same room in each of your properties. It is a little like playing chess - -you memorize patterns but apply them differently for each game.

While I'm giving away all my retail/leverage the marketing spend of others secrets, here are a few more decor practices that distinguish a high end rental.

1. Always provide headboards, feather beds and cotton blankets to any bed. Pillows = 2x the body capacity
2. Never use a full sized bed. Ever. Period.
3. A 3 seater sofa and 2 chairs is always superior to a sectional.
4. The best window covering is always a 2" wood venetian blind in the same color as the wall.
5. Plates = 2x the sleeping capacity, Bowls = 3x the sleeping capacity, Tableware = 4x and Glasses = 5x.
   

A final tip: the right look for what is selling, even in slow markets, is usually found at upscale home developments. We routinely sneak a peak at the staged homes by the developers at Crescent Communities, and so can you.

See you at the winter watering holes!

Lifestyle Transition Stress

One of the most common sources of lifestyle transition stress that I see is communications failure. Insufficient communication with our family is a habit that most of us are guilty of-- we think "they know" us and our thoughts. Insufficient communication has tangible, unpleasant consequences that can negatively impact the lifestyle transition experience, regardless of whether the move is emotionally perceived positively as an exciting event by the actual mover.

I wrote in an earlier post about adult children successfully talking with an Elder about new and appropriate lifestyle choices. However, sometimes the point of resistance is actually the Adult Children, who don't understand or don't wish to support (for a variety of reasons) a lifestyle transition choice by their parents.

Rather than waiting until a moment of lifestyle crisis to inform or discuss your preferences, we see much better results from Elders who initiate joint family planning session with open, honest & direct interaction. Your wealth manager, family office executive or religious advisor is a good choice for a facilitator.

The two overt goals for this meeting (or series of meetings) are to:

1. Secure respect and support for your personal lifestyle wishes for each stage of your future life, including final arrangements
2. Identify and scope expected financial and lifestyle interdependencies and plan appropriately

This meeting will trigger emotions. In the preparation stages, my clients often experience performance anxiety. During the meeting itself everyone gets caught up in the natural rhythm of surfacing emotions, memories, and concerns. Afterwards, there is typically exhilaration, because my clients feel so proud to have lead by example (yet again) for their children. Celebration, and sometimes atonement, are possible and valued outcomes.

Lifestyle transitions are the result of a planning process, which can trigger the matrix of emotions within a family relationship. Most of us don't shed belongings, or consider a lifestyle change, in a vacuum. Rather than waiting until a lifestyle transition is thrust upon us, my first piece of advice to any potential client is that we are always more effective and satisfied when we are collaborative, communicative and proactive in deciding and implementing our preferences.