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Welcome to the Commercial Real Estate Mastery podcast, where you'll learn the correct way to identify, negotiate, perform due diligence on, renegotiate, finance, turn around and operate real estate in today's market -- a market in which volatility creates opportunity, and sound principles defeat fads and bubbles. And your host is a 25-year commercial real estate veteran and co-owner of over $1 billion in real estate assets, Frank Rolfe.
People love to use the term existential threat. It's probably the most overused words in the American language. Everyone says the democracy is at risk. Everything is always at risk. And one item that people do need to ponder from time to time, based on the way the narratives go, is the seemingly endless existential risk to landlords. There's simply so much media hate to the concept of people owning properties. This is Frank Rolfe with the Commercial Real Estate Mastery Podcast. We're going to explore this concept of existential threats to landlords. Let me start off by giving you a statistic that the media would never admit, and that's that even in apartment complexes, 43% of Americans say they hate their landlord, but 57% say they like the landlord. So all these articles you read brimming with the concept that everyone hates their landlord, that's simply not true. Roughly 60% of people like them and 40% don't like them. And the top reason that these landlords are hated by 43% of tenants is because of lack of repair and maintenance. And that means it's pretty much only the lower end properties where you have that much hate. But properties that don't have poor repair and maintenance often don't test with hardly anyone hating them.
People like what they're... Where they're living. They like the commercial space they have. They're more than happy to pay the rent. They find it to be a fair value. So then where does all the hate come from? The articles against landlords. Political discussion against landlords are seemingly endless, particularly in the housing industry. Well, what happened? How did landlords go from being well liked in the media? Look back at the Lucy and Ricky Show. You know, the Lucy show with Lucille Ball and Ricky Ricardo and what do you remember from the show? Remember the Mertzs, the landlord of the apartment building in New York? They were best buddies, the Mertzs, the landlords were all the time going on vacations with Lucille Ball and doing different stuff. That's the way the media used to portray landlords. So how in the world are we getting so screwed up as we are now? Well, the big problem you have is that our nation has changed very much politically. And so it's very popular today to hate capitalism, hate the free market. And many people feel that landlords encapsulate the worst of both because you have one landlord who holds the destiny to a large number of tenants.
People don't like that. They think it's not fair. How come capitalistically, one person happened to own this thing? It's imperialism at its worst. And they also feel that landlords are always gouging people charging too much rent. Rent goes up too fast. But that's more of an ideological issue. It's not really a case of actual business. It's something where no matter what the landlord does with those kinds of people, it would always be criticized. If the landlord gave every tenant a thousand dollars, they would say, well, that's not enough. Give them more. Why can't you give them 5,000? Why can't you give them 10,000? I was once interviewed on NPR and the reporter asked me, why do you have to raise rents? Why can't you leave them flat? Why can't you reduce them? I explained to them, well, that's a crazy question because we know that all the costs in America are going up every year, at least by the rate of inflation, if not higher. So what you're asking me is why I don't actually have declining net income annually? Yeah, why not? Why can't you do that? And you know, remember that socialism, Margaret Thatcher said, doesn't work because you eventually run out of other people's money.
If I said to the reporter, okay, well, if I do that, are you going to put in the negative instead of me, like, why am I the only one doing that? They would, of course, would immediately recoil and we'd all find out it's not entirely true. But that's a big issue, is a political issue with landlords. But there's another problem, and that is there's just not that many landlords out there. If you really think about it, how many people in America actually own commercial property? It's a tiny microcosm of the US population. Many people own houses. Half of all American households, they own their home. They don't own it free and clear most of the time, but they're in fact a homeowner, not a home renter. So that's half of the population. But what do you imagine the percent of people are that own commercial property? How big is that? 1%, 5%? Very easy to be outnumbered when you are 1% against 99% who don't. And the media likes to take attention of that. They understand this. So therefore they can write negative landlord issues and they can offend that one landlord. But, you know, the 99 people who are tenants, well, they'll applaud it.
Another issue you have is that in America, things have changed so much with the Internet, as far as what a media outlet even is. I often, when I see articles that are negative on landlords. I'll look up and say, okay, now who is this talking? Like who is this group? And when I was growing up, we only had a few media outlets. We had ABC, CBS, NBC. That was pretty much it, just those three. And even today if you go on cable, there's more than that. There's CNN, there's Fox. But if you add it all together, real legitimate media groups in America, I don't even know if there's 10, probably less than 10. But when you look at a lot of these stories, they're emanating not from actual well known media groups. They come out of places you've never heard of, little media news offshoots, so random, so tiny. I urge you to look at a lot of these, like just go online and say what is the viewership of this thing... I've pulled up where they have virtually no viewership, 100 people. Another good ways to go to YouTube, pull up some of their stories from the past and look how many YouTube hits I've done that and found people had like 24 hits.
They don't have an audience yet in America today we tend to count everyone, large and small as a legitimate media outlet because they all use the same excuse. Well, we're on the Internet so we have access to billions of viewers. Who cares? That means absolutely nothing. It's the same thing people do when they post videos today of them singing a song or playing a guitar and claiming they have millions and millions of viewers. No, they don't probably have like just 10 people. But the simple fact that they have access to all those people thanks to the Internet, they try and spin that in a different manner. I find that most of your any landlord articles are from little tiny media groups. Not ABC, not NBC, not CBS, not Fox, not CNN, not any of those top 10. But instead ones that would score so lowly on the totem pole that we couldn't even really find out where they are. Now. That's not to say that we don't have issues politically as landlords in America. So what can you do about that? Well, the first thing is stick with properties that are decent. Don't get involved in those really downscale properties.
That's where most of these issues emanate. That's where most of the news articles come from. So stick with the nice properties and make your property look nice from the street. Because often what happens is people can manipulate with photographs for articles or talking to the city inspector. And if you don't look good from the street, there'll be lots of complaints on your property by the people who don't live there or work there, but simply drive by all the time and think that you're just a bad person and a bad operator. Also, feel free to get politically connected. You know, join the chamber of commerce of whatever town your property is in. It's a great idea. It gives you a little protection using that good old boy network that we all know exists out there and/or, you know, talk to your local politicians, get to know your state senator, your real senator, your real House representatives member. Let them know that you do a good job, that basically you're the solution, not the problem. And often you can help turn the tide simply by opening their eyes to what's really going on with landlords. The bottom line is I don't think we have an existential threat against landlords in America, much like all the other rumored existential threats.
It really isn't totally overblown. The media has made it overblown. They've done their best to accomplish that, but things really aren't as bad. What happens is America goes in cycles. People get all interested in stuff, they get bored with it, they move on. I think we're already on the downward slide. I think people are already getting very, very bored with the whole narrative against landlords. They're moving on to new things to hate. You know, the war in Iran is giving them new fodder. There's new things going on. But I think a lot of this landlord thing... That was basically because of two reasons. Number one, people got very bored. But also during COVID when everyone was locked down, stuck in their apartment, stuck wherever they were, they grew to overthink the concept of being a tenant. And during COVID there wasn't a whole lot to talk about. We were all basically frozen in place, often wearing a mask. But I think things will improve in the years ahead. This is Frank Rolfe with the Commercial Real Estate Mastery Podcast. Hope you enjoyed this. Talk to you again soon.